Calculate the price elasticity of demand at the monopolists, Econometrics

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Calculate the price elasticity of demand at the monopolists

Assume that a monopolist sells a product with a total cost function TC = 1,200 + 0.5Q2 anda corresponding marginal cost function MC = Q. The market demand curve is given by theequation P = 300 - Q.

a. Find the profit-maximizing output and price for this monopolist. Is the monopolistprofitable?

b. Calculate the price elasticity of demand at the monopolist's profit-maximizingprice. Also calculate the marginal cost at the monopolist's profit-maximizingoutput. Verify that the IEPR holds.

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Econometrics: Calculate the price elasticity of demand at the monopolists

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