The inverse demand curve is given by p(y)= 10-y and a monopolist

has a fixed supply of 4 units of a good available.
a)How much will it sell and what price will it set?
b) What would be the price and output in a competitive market with these demand and supply characteristics?
c) What would happen if the monopolist had 6 units of the good available? (Assume free disposal.)

1 answer

a) The monopolist will sell 4 units of the good and set a price of 6.
b) In a competitive market, the price would be 10-4=6 and the output would be 4 units.
c) If the monopolist had 6 units of the good available, the price would be 10-6=4 and the output would be 6 units.
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