This preview shows page 1. Sign up to view the full content.
Unformatted text preview: * denote the profitmaximizing output level, setting MR = MC then yields: a  2bQ * = cQ * which solves for Q * = a/(2b+c) P * is then found by substituting Q * into the demand equation. EXERCISE: Find the profitmaximizing price and quantity for a monopolist with the demand curve P = 15  2Q d and the marginal cost curve MC = Q. HOW TO PROCEED: 1. Try to find the solution of the above exercise. 2. If you cannot find it easily, then read carefully the whole Appendix provided in the textbook (Frank, Robert H. and Ben S. Bernanke (2006): Principles of Microeconomics , 3rd edition, McGrawHill), pages 318. 3. Practice by doing exercises. 4. If you need further assistance and help in understanding this Appendix, please feel free to ask....
View Full
Document
 Fall '10
 S.C
 Economics, Monopoly

Click to edit the document details