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 = 28 − Q and has a constant marginal cost of $4. What price maximizes its profit?

Show solution

MR = 28 − 2Q. Set MR = MC: 28 − 2Q = 4 → Q = 12. Price from demand: 28 − 1(12) = $16.

Problem 2.

A monopoly faces demand P = 24 − Q and has a constant marginal cost of $14. What price maximizes its profit?

Show solution

MR = 24 − 2Q. Set MR = MC: 24 − 2Q = 14 → Q = 5. Price from demand: 24 − 1(5) = $19.

Problem 3.

A monopoly faces demand P = 46 − 2Q and has a constant marginal cost of $10. What price maximizes its profit?

Show solution

MR = 46 − 4Q. Set MR = MC: 46 − 4Q = 10 → Q = 9. Price from demand: 46 − 2(9) = $28.

Problem 4.

A monopoly faces demand P = 32 − 2Q and has a constant marginal cost of $8. What price maximizes its profit?

Show solution

MR = 32 − 4Q. Set MR = MC: 32 − 4Q = 8 → Q = 6. Price from demand: 32 − 2(6) = $20.

Problem 5.

A monopoly faces demand P = 90 − 2Q and has a constant marginal cost of $10. What price maximizes its profit?

Show solution

MR = 90 − 4Q. Set MR = MC: 90 − 4Q = 10 → Q = 20. Price from demand: 90 − 2(20) = $50.

Problem 6.

A monopoly faces demand P = 42 − Q and has a constant marginal cost of $14. What price maximizes its profit?

Show solution

MR = 42 − 2Q. Set MR = MC: 42 − 2Q = 14 → Q = 14. Price from demand: 42 − 1(14) = $28.