There is only one least-cost way to make wooden boxes for shipping tomatoes, and

Question

There is only one least-cost way to make wooden boxes for shipping tomatoes, and any firm that makes them has a cost function given by TC = 200 + q + .005q^2. The inverse market demand for boxes is given by P = 10 - .005Q. There is currently only one firm in the industry and it is able to act as a monopolist. (a) What is its output and what price does it charge for boxes? (b) What is the firm's profit at this output level? (c) Does the firm have any producer's surplus? Support your answer by calculating it. (d) What is the magnitude of consumer's surplus in this situation? Much Thanks!

Explanation / Answer

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