ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Please answer 3a as attach image 

3. Suppose:
3a. the inverse demand function for a monopolist's product is given by
P = 100-20
C(Q) = 10+20.
and the cost function is
Determine the profit-maximizing price, quantity and maximum profits. (Lesson 6, 9)
3b. Liuliu.com used to be the only telecommunication company in Malaysia. This makes it a
monopoly firm. By theory, LiuliuCom will charge higher price (per subscription) and sell at a
smaller output (subscription), to gain abnormal profits. Suppose LiuliuCom demand curve
and cost curve are estimated at:
P = 225-2Q
TC = 1,100 + 3Q2
Analyse how LiuliuCom achieves its maximum profit. The answer should include profit,
equilibrium price (per subscription), output (subscription), MC and MR.
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Transcribed Image Text:3. Suppose: 3a. the inverse demand function for a monopolist's product is given by P = 100-20 C(Q) = 10+20. and the cost function is Determine the profit-maximizing price, quantity and maximum profits. (Lesson 6, 9) 3b. Liuliu.com used to be the only telecommunication company in Malaysia. This makes it a monopoly firm. By theory, LiuliuCom will charge higher price (per subscription) and sell at a smaller output (subscription), to gain abnormal profits. Suppose LiuliuCom demand curve and cost curve are estimated at: P = 225-2Q TC = 1,100 + 3Q2 Analyse how LiuliuCom achieves its maximum profit. The answer should include profit, equilibrium price (per subscription), output (subscription), MC and MR.
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