Suppose a certain city has a monopoly cable-television company. This company has total costs TC = Q2 + 10Q + 75. (Hint: using calculus, this means MC = 2Q + 10 since MC is the derivative of TC with respect to output.) The demand in the community is approximated by the equation Qd = 85 - P/2 (alternatively, you can write the demand equation as Qd = 85 – 0.5P). Graphically depict the demand curve as well as the marginal cost (MC) curve.If the cable company is free to choose its own price Pm and quantity Qm, graphically depict the monopoly equilibrium price and quantity. Add any other curve(s) to your diagram that may be required to obtain this outcome.Compute and state the exact monopolist equilibrium price Pm and quantity Qm that you depicted graphically.

Business economics includes making decisions and allocating resources in the face of numerous…

Answered: Suppose a certain city has a monopoly…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose a certain city has a monopoly cable-television company. This company has total costs TC = Q² + 10Q + 75. (Hint: using calculus, this means MC = 2Q + 10 since MC is the derivative of TC with respect to output.)

The demand in the community is approximated by the equation Q_d = 85 - P/2 (alternatively, you can write the demand equation as Q_d = 85 – 0.5P).

Graphically depict the demand curve as well as the marginal cost (MC) curve.
If the cable company is free to choose its own price P_m and quantity Q_m, graphically depict the monopoly equilibrium price and quantity. Add any other curve(s) to your diagram that may be required to obtain this outcome.
Compute and state the exact monopolist equilibrium price P_m and quantity Q_m that you depicted graphically.

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