Question
A monopolist faces the demand curve Q = 70 - P/2. He has total fixed costs of TFC and constant marginal costs of $20 per
A monopolist faces the demand curve Q = 70 - P/2. He has total fixed costs of TFC and constant marginal costs of $20 per unit of output. His total costs are therefore TC = TFC + 20Q if Q>0 and TFC if Q=0. What is the largest value of TFC for which he would be willing to produce a positive level of output if (i) the firm is already in the market; (ii) the firm is considering entering the market?
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
