question archive Suppose that John is a monopolist in the market of a specific video game
Suppose that John is a monopolist in the market of a specific video game
Subject:MarketingPrice:2.88 Bought3
Suppose that John is a monopolist in the market of a specific video game. His inverse demand curve and cost function are the following:
The Equilibrium Price is _____.
a. $60
b. $200
c. $40
d. $80
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Ans: a. $60
TR = P * Q = 80Q -
MR is the first-order derivative of the TR function.
MR = 80 - Q
MC is the first-order derivative of TC function.
MC = Q
The profit maximization condition is,
MR = MC
80 - Q = Q
2Q = 80
Q = 80 / 2 = 40
P = 80 - (Q / 2) = 80 - (40 / 2) = $60
