If a firm with monopoly pricing power in the market faces a demand curve of P = 2,000 - 2Q and marginal cost of MC = 1,100 + 2Q,then the firm will produce at a price of
A)$16.
B)$1,400.
C)$1,700.
D)$1,600.

Question

Quizplus · Accepted Answer

To find the monopoly price, set MR = MC. First, derive MR from the demand curve: MR = 2000 - 4Q. Set MR = MC: 2000 - 4Q = 1100 + 2Q. Solving gives Q = 150. Substitute Q into the demand curve to find P: P = 2000 - 2(150) = 1700.

If a Firm with Monopoly Pricing Power in the Market