# A natural monopolist faces the following demand: P = 715 - 7Q The monopolist has the following...

## Question:

A natural monopolist faces the following demand:

{eq}P = 715 - 7Q {/eq}

The monopolist has the following cost function:

{eq}C = 319Q + 736 {/eq}

How much output will this firm produce to maximize profit? Round our answer to one decimal place.

## Monopoly's Profit Maximization:

A monopoly is a firm that is the sole seller of a certain product in the market. The product produced by a monopoly is unique and has no close substitutes. This means that the monopoly does not face any competition from other firms. Therefore, monopolies have the ability to set a price for its product and also have the exclusive control of the quantity supplied in the market.

Monopoly firms maximize profits at the point where the marginal revenue is equal to their marginal cost of production. That is:

{eq}MR = MC {/eq}

T...

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