Re: Points of discontinuity (holes and vertical asymtotes)

Posted by Vidhya on Dec 16, 2017; 4:56pm
URL: http://discussion-forum.276.s1.nabble.com/Points-of-discontinuity-holes-and-vertical-asymtotes-tp7608497p7608520.html

A monopolist manufactures widgets. The quantity, q that the monopolist produces must be a non-negative integer. The total cost C(q) of producing q units is C(q) = 10q. The inverse demand curve for widgets is p(q) = 20/q, where p denotes the market price of widgets. What is the monopolist’s profit maximizing q?

(a) The problem does ot have a solution.
(b) 1
(c) Infinity
(d) 0

Solving using MR=MC does not give any solution, but q=1 gives the maximum profit (for q >0). Is this approach correct?