A monopoly firm is faced with the following demand function
P = 13 – 0.5Q
The Marginal Cost function for the firm is given by 3 + 4Q and the total fixed cost
is 4.
Determine:
a) The profit maximizing output. (8 marks)
b) The level of supernormal profit if any. (4 marks)
c) The output level at the break-even point. (3 marks)