The industry demand function for bulk plastics is represented by following equat

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P= 800 – 20Q TC = 300 + 500Q + 10Q^2 ==>Revenue=P*Q ==>Revenue=Q(800-20Q)=800Q-20(Q^2) ==> Marginal revenue=800-40Q Now, TC=300 + 500Q + 10Q^2 ==>Marginal Cost = 500+20Q For monopolist MC=MR ==>500+20Q=800-40Q ==>60Q=300 ==>Q=5 at Q=5 , P will be 800-20(5)=700 Profit =Revenue-Total Cost ==>profit={800Q-20(Q^2)}-{300 + 500Q + 10Q^2} putting Q=5,we get profit=3500-3050=450 Therefore Profit maximizing Price=700 and Profit maximizing output is 5 millions of pounds of plastic.

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