Inverse Demand Equation: P = 170 - 4Qd
Marginal Costs = $10
MR = 170 - 8Qd
-A monopoly firm would charge a price of:
A) $90.
B) $170.
C) $680.
D) $20

Question

Quizplus · Accepted Answer

To find the monopoly price, first, we need to equate MR to MC to find the quantity produced by the monopoly. Given MR = 170 - 8Qd and MC = $10, setting them equal gives 170 - 8Qd = 10. Solving for Qd gives Qd = 20. Substituting Qd = 20 into the demand equation P = 170 - 4Qd gives P = 170 - 4(20) = 170 - 80 = $90.