A Question per day - Day 11



1. Assume that a monopoly firm seeks to maximize revenues when facing the following conditions:

(Demand) P = 1000 - 2Qd
(Marginal Revenue) MR = 1000 - 4Qd

a. What is the most possible output that this monopoly would produce if MC = 0?
b. What are the maximum revenues that this firm can generate by charging the same price for each unit sold?
c. When producing the output level from part a, what would be the (own price) elasticity of demand facing this monopolist?