monopoly question

[Vaishali20]

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[ManpreetDeconomist]

I think answer should be Q= 5.

The monopoly wll want to minimize quantity produced (ie minimize costs) since P.Q = 100 is total revenue which is fixed....

So optimally it would want to choose Q= 1/99. however for that price becomes > 20. for which the consumer will demand 0 units..

So monopolist will produce 5 units and charge 20 for each unit.. total rev= 100 , TC = 5.. profit =95

[Vaishali20]

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