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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.