View Full Version : What price would the monopolist charge to maximize its profits?
lucinda1234
Jan 21, 2016, 03:34 PM
An engineering industry has the following market supply and demand equations: P=100-2Qd
P=30+3Qs
Suppose the industry is taken over by a monopolist. What price would the monopolist charge to maximize its profits?
A) 80
B) 90
C) 100
D)110
I worked out the equilibrium price and used it with P= 100-4Qd but not getting the right answer..
paraclete
Jan 21, 2016, 05:37 PM
An engineering industry has the following market supply and demand equations: P=100-2Qd
P=30+3Qs
Suppose the industry is taken over by a monopolist. What price would the monopolist charge to maximize its profits?
A) 80
B) 90
C) 100
D)110
I worked out the equilibrium price and used it with P= 100-4Qd but not getting the right answer..
Logic suggests the maximum price since the monopolist has taken over the industry and therefore has no competition
talaniman
Jan 21, 2016, 05:59 PM
Set up a graph.
Dchdman
Jan 22, 2016, 12:51 AM
Logic suggests the maximum price since the monopolist has taken over the industry and therefore has no competition
Logic would dictate that , though if they have the monopoly " Taken over the industry " they could charge anything.
I mean if they over price their items , no one would buy them.
Hmm you may have to graph this one out, though I believe it's the 90.
Make it low enough that people would want to buy , though not making it cheap that they lose money over it.