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A monopoly faces a demand function Q(p)=50-p/2
A monopoly faces a demand function Q(p)=50-p/2. What is the maximal price at which it is able to sell q units?
A. p(q)=100-3q
B. p(q)=50-2q
C. p(q)=50-q
D. p(q)=100-2q
E. p(q)=100-q
Expert Solution
Since the monopolist is not a price taker, it can sell qq unit of goods at p(q)p(q) from inverse demand function.
Demand function is given as
q(p)=50−p2
Thus, the invert demand function is p(q)=50×2−2q=100−2q
So, the answer is (d).
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