Monopoly behaviour

[rongmon]

Gargantuan Enterprises has a monopoly in the production of antimacassars. The labor supply equation there is W = 10+0.1L, where W is the daily wage and L is the number of person days of work performed. Antimacassars are produced with a production function, Q = 10L, where L is daily labor supply and Q is daily output.

The demand curve for antimacassars is P = 41 − Q/1000, where P is the price and Q is the number of sales per day.

Find the profit-maximizing output for Gargantuan.

[vandita24x7]

What are the options ?

vandita

On 26 Apr 2014 10:12, "rongmon [via Discussion forum]" <[hidden email]> wrote:

Gargantuan Enterprises has a monopoly in the production of antimacassars. The labor supply equation there is W = 10+0.1L, where W is the daily wage and L is the number of person days of work performed. Antimacassars are produced with a production function, Q = 10L, where L is daily labor supply and Q is daily output.

The demand curve for antimacassars is P = 41 − Q/1000, where P is the price and Q is the number of sales per day.

Find the profit-maximizing output for Gargantuan.

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NAML

[rongmon]

The answer is 1000 units.

Looking for the workings.

[vandita24x7]

Ok fr profit eqn. U need TR n TC. U hv the TR given. For TC.. C= w*l
Put eqn of w here and multiply by L. Now in place of L put Q/10. So u get TC in terms of Q. Now solve

vandita

On 26 Apr 2014 10:59, "rongmon [via Discussion forum]" <[hidden email]> wrote:

The answer is 1000 units.

Looking for the workings.

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[rongmon]

Thanks.