2. Economics
3. a monopoly has the following demand curve q 800...

# Question: a monopoly has the following demand curve q 800...

###### Question details

A monopoly has the following demand curve:       Q = 800 – 25*P

The associated marginal revenue curve is:            MR = 32 - .08*Q

a) Graph the demand and marginal revenue curves.

b) Suppose that the firm has a constant marginal cost of $15 per unit. Draw the MC line on your graph. What is the profit maximizing level of output? What is the profit-maximizing price, as found on the demand curve at the chosen level of output? The textbook has some graphs that might be useful here. b) Q= 800-25*P c) If MC is constant at$15, then we know that AVC = $15 and VC =$15*Q. Suppose the firm has a fixed cost of $1,000 so that TC = FC + VC =$1,000 + \$15*Q.