- #1
jose_m
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Homework Statement
For a monopolist's product, the demand equation is:
p = 42 - 4q
and the average-cost function is
c = 2 + (80/q)
Find the profit-maximizing price.
Homework Equations
When i started to solve the problem, i deduced from what i needed to find that I needed to make up a function, plugging in the above functions into profit = (price-cost)quantity.
To what extent I'm correct I'm not sure.
The Attempt at a Solution
I tried plugging it in like this: profit = ((42-4q-2-(80/q)) all that multiplied by q. I don't seem to know if i multiply that whole equation just by q, or by finding a formula for q from those other functions they already gave me. I tried it and it gave me q= 80/(c-2) but then, do i have to substitute c in that formula.
I really don't know where to go from here. would appreciate any help given please.