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A monopolist has a total cost of TC = 500 + 55Q - 3Q2 + 0.1Q3 and faces a market demand curve P = 110
A monopolist has a total cost of TC = 500 + 55Q - 3Q2 + 0.1Q3 and faces a market demand curve P = 110 - 6.5 Q. Determine the price elasticity of demand at the short-term equilibrium.
Can you explain to me where I may have gone wrong?
TC = 500 + 55 Q -3 Q^2 + 0.1 Q43 MC = 55 -6 Q+ 0.3 Q^2 P = 110 -6.5 Q Q = 15.71429 -0.14286 P TR = 110 Q -6.5 Q^2 MR = 110 -13 Q Short-term equilibrium MC = MR 110-13Q = 55 - 6.50 + 0.3Q^2 Q= -10.8333 =-65/6 P = 185.8333 =C9-7*C16 MR = 261.6667 = P (1 + 1/price elasticity) PRICE ELASTICITY = 2.450549 =1/(C18/C17-1)Step by Step Solution
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