Amonopolist faces a demand curve given by

p = 40 – q

where p is the price of the good and q is the quantity demanded.

the marginal cost of production is constant and is equal to $2. there are no fixed costs of production.

what quantity should the monopolist produce in order to maximize profit?

what price should the monopolist charge in order to maximize profit?

how much profit will the monopolist make?

what is the deadweight loss created by this monopoly? (hint: compare the monopoly outcome with the perfectly competitive outcome).

monopoly deadweight loss =

if the market were perfectly competitive, what quantity would be produced?

It will maximize at 19 units at price 21 with a profit of 361 dollars

This monopoly will generate a deadweight loss of 190 dollars

While also decreasing the quantiy available from 38 to 19

Explanation:

The company will maximize their profit at the point which marginal cost equals marginal revenue.

Marginal revenue: income from additional unit

Total revenue P x Q

where P = 40 - Q

Revenue = (40 - q ) x q = 40q - q^2

we derivate and get the marginal revenue

-2q+40

We now equalize this with marginal cost of $2 dollars

-2q + 40 = 2

40 - 2 = 2q

38/2 = q = 19

It maximize profit by selling 19 units

Price 40 - Q = 40 - 19 = 21

Profit: (price - cost ) quantity

(21 - 2) * 19 = 361

On a perfectly competitive market price will be equal to the marignal cost thus:

P = 2

giving a quantity of

2 = 40 - Q

q = 38

the deadweight loss would be:

(39 - 19) x (21 - 2) / 2

20 x 19 / 2 = 190

answer; management is about coping complexity and leadership is about coping with change; i believe this is correct; ///good luck                                          

(b) management: leadership