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A monopoly produces widgets at a marginal cost of $20 per unit and zero fixed costs. It faces an inverse demand function given by p = 100 − 4q. What are the profits of the monopoly in equilibrium?

Respuesta :

If the value of total revenue and the total cost is 600 and 200. Then the profit of the monopoly in equilibrium will be 400.

What is a profit?

Benefit is the cash a business pulls in subsequent to representing all costs.

A monopoly produces widgets at a marginal cost of $20 per unit and zero fixed costs. It faces an inverse demand function given by

p = 100 − 4q

Total revenue = P x Q = (100 - 4Q) x Q = 100Q - 4Q²

Then

MR or marginal revenue = 100 - 8Q

Equilibrium is at a point when MR = MC

100 - 8Q = 20

        8Q = 80

          Q = 10

Then we have

P = 100 - 4 x 10 = 60

Then the total revenue will be

Total revenue = 60 x 10 = 600

Then the total cost will be

Total cost = 10 x 20 = 200

Then the profit will be

Profits = 600 - 200 = 400

More about the profit link is given below.

https://brainly.com/question/15036999

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