2) The Epson Company is a monopolist in the market and faces the demand curve shown in thefigure below. The firm's marginal cost curve is MC= 100 +2Q.a. What is the firm's profit-maximizing output and price?Price($/unit)4000D200Quantity of printers(thousand)b. If the firm's demand changes to P = 300 - Q while its marginal cost curve remains the same,what is the firm's profit-maximizing level of output and price? How does this compare to youranswer for (a)?c. Draw a diagram showing these two outcomes. Holding marginal cost equal, how does theshape of the demand curve affect the firm's ability to charge a high price? (bonus question 5points)

Profit maximisation is the level where Marginal revenue and marginal cost curve is equal . this is…

) The Epson Company is a monopolist in the market and faces the demand curve shown in the igure below. The firm's marginal cost curve is MC= 100 + 2Q. -. What is the firm's profit-maximizing output and price? Price ($/unit) 400 0 D 200 Quantity of printers (thousand)

) The Epson Company is a monopolist in the market and faces the demand curve shown in the igure below. The firm's marginal cost curve is MC= 100 + 2Q. -. What is the firm's profit-maximizing output and price? Price ($/unit) 400 0 D 200 Quantity of printers (thousand)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2) The Epson Company is a monopolist in the market and faces the demand curve shown in the
figure below. The firm's marginal cost curve is MC= 100 +2Q.
a. What is the firm's profit-maximizing output and price?
Price
($/unit)
400
0
D
200
Quantity of printers
(thousand)
b. If the firm's demand changes to P = 300 - Q while its marginal cost curve remains the same,
what is the firm's profit-maximizing level of output and price? How does this compare to your
answer for (a)?
c. Draw a diagram showing these two outcomes. Holding marginal cost equal, how does the
shape of the demand curve affect the firm's ability to charge a high price? (bonus question 5
points)

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