Question

If the inverse demand curve a monopoly faces is p = 100 - 2Q, then profit maximization

is achieved when 25 units are produced.
is achieved by setting price equal to 25.
is achieved only by shutting down in the short run.
cannot be determined solely from the information provided.

Answer 1

is achieved when 25 units are produced.

Step-by-step explanation:

profit is maximum at MR = MC

MR = 100 - 4Q

the MR curve is double sloped than the demand curve

since we were not given the MC;

let MC = 0 , then:

100 - 4Q = 0

4Q = 100

Q = 25

Therefore, The profit maximization is achieved when 25 units are produced.