Now, suppose you are the manager of a monopoly, and the research department of your firm has estimated your demand and cost functions as P=190-2Q, the total cost is TC=600+10Q+2.5Q² and the marginal cost is given by MC=10+5Q.

The monopoly pricing rule is when given the level of output, Q^M , that maximizes profits, the monopoly price is the price on the demand curve corresponding to the Q^M units produced.

P^M = P ( Q^M )

Use theMonopoly Pricing Rule to find the price P* that the firm should charge when maximizing its profit.