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..

Quote:

---

Originally Posted by lucinda1234

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

Set up a graph.

Quote:

---

Originally Posted by paraclete

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.