Answer:
1. q = 60 million doses
2. 360 millions
Explanation:
Given that:
The cost function C(q) = 5,000 + 0.1q²
Then, the Marginal cost MC = [tex]\frac{dC}{dq} = 0.2 \ q[/tex]
Again, inverse demand curve p(q) = 18 - 0.2 q
Then the total revenue TR = [tex]p*q = 18 -0.2q^2[/tex]
Also; the marginal revenue MR = [tex]\frac{dTR}{dq}[/tex]
= 18 - 0.1q
In the bid to maximize profits from BBG; MR = MC
i.e
18 - 0.1 q = 0.2 q
0.3 q = 18
q = 18/0.3
q = 60 million doses
At the profit maximizing output, the price charged will be equal to :
[tex]\mathbf{p_m = 18-(0.2*60)} \\ \\ \mathbf{p_m = 18-12} \\ \\ \mathbf{p_m = 6\ dollars \ per \ dose}[/tex]
Thus; producer surplus of Olderna at the monopoly price and quantity = price × quantity
= $6 × 60 millions
= 360 millions