Q1. Demand for a product of a monopoly is given as Q=100-2P.
(a) Graph demand and marginal revenue of the firm.
(b) Find the revenue maximizing cost and quantity of the monopoly.
(c) Prove which at the revenue-maximizing quantity, cost elasticity of demand equals one.
(d) Find the cost elasticity when cost of the product is $30.
Q2. A monopoly has the cost function, TC = 1/3Q3 - 5Q2 + 23Q + 25, where TC is the total cost and Q is the output. Illustrate what is the profit-maximizing level of output, if the market demand is given as Q = -2p + 90.