Monopoly price practice problems

Microeconomics Unit 4. Try each one, then open the worked solution. The Credit Sprint app generates unlimited new versions with fresh numbers.

Problem 1.

A monopoly faces demand P = 36 − 2Q and has a constant marginal cost of $12. What price maximizes its profit?

Show solution

MR = 36 − 4Q. Set MR = MC: 36 − 4Q = 12 → Q = 6. Price from demand: 36 − 2(6) = $24.

Problem 2.

A monopoly faces demand P = 44 − Q and has a constant marginal cost of $12. What price maximizes its profit?

Show solution

MR = 44 − 2Q. Set MR = MC: 44 − 2Q = 12 → Q = 16. Price from demand: 44 − 1(16) = $28.

Problem 3.

A monopoly faces demand P = 32 − Q and has a constant marginal cost of $16. What price maximizes its profit?

Show solution

MR = 32 − 2Q. Set MR = MC: 32 − 2Q = 16 → Q = 8. Price from demand: 32 − 1(8) = $24.

Problem 4.

A monopoly faces demand P = 82 − 2Q and has a constant marginal cost of $14. What price maximizes its profit?

Show solution

MR = 82 − 4Q. Set MR = MC: 82 − 4Q = 14 → Q = 17. Price from demand: 82 − 2(17) = $48.

Problem 5.

A monopoly faces demand P = 42 − Q and has a constant marginal cost of $4. What price maximizes its profit?

Show solution

MR = 42 − 2Q. Set MR = MC: 42 − 2Q = 4 → Q = 19. Price from demand: 42 − 1(19) = $23.

Problem 6.

A monopoly faces demand P = 84 − 2Q and has a constant marginal cost of $20. What price maximizes its profit?

Show solution

MR = 84 − 4Q. Set MR = MC: 84 − 4Q = 20 → Q = 16. Price from demand: 84 − 2(16) = $52.