Question 18Alex Potter owns the only well in a town that produces clean drinking water. He faces the following demand P=200-2Q, and marginal cost MC=50+2Q, marginal revenue MR= 200-4Q curves. In order to maximize profits, Alex should charge a price of$150 at the profit maximizing quantity with a marginal revenue equal to $150.$100 at the profit maximizing quantity with a marginal revenue equal to $150.$100 at the profit maximizing quantity with a marginal revenue equal to $100.$150 at the profit maximizing quantity with a marginal revenue equal to $100.O O

As Alex owns the only well in a town so it means he has the monopoly of clean drinking water.…

Alex Potter owns the only well in a town that produces clean drinking water. He faces the following demand P=200-2Q. and marginal cost MC=50+2Q, marginal revenue MR= 200-4Q curves. In order to maximize profits, Alex should charge a price of

Alex Potter owns the only well in a town that produces clean drinking water. He faces the following demand P=200-2Q. and marginal cost MC=50+2Q, marginal revenue MR= 200-4Q curves. In order to maximize profits, Alex should charge a price of

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 7MC

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