Monopolist Pricing Game

Adjust demand and cost curves to find the profit-maximizing price and quantity

Demand (D)
Marginal Revenue (MR)
Marginal Cost (MC)
Avg Total Cost (ATC)
Profit / Loss

Demand Curve

P-Intercept (max price)100
Q-Intercept (max quantity)100

Cost — TC = F + c·Q + d·Q²

Fixed Cost (F)200
Marginal Cost Coeff (c)10
Quadratic Cost (d)0.5

Optimal Results

Quantity (Q*)
—
Price (P*)
—
Total Revenue
—
Total Cost
—
Profit
—

How Monopolist Pricing Works

A monopolist is the sole seller in a market and faces the entire market demand curve. Unlike a competitive firm, a monopolist must lower its price to sell more units, which means its marginal revenue (MR) falls faster than the demand curve.

The profit-maximizing rule is to produce where MR = MC. At that quantity Q*, the monopolist charges the highest price consumers will pay, read from the demand curve. Profit equals (P* − ATC) × Q*, shown as the shaded rectangle on the chart. If ATC exceeds P* at the optimal quantity, the monopolist incurs a loss.

Use the sliders to explore: the P-intercept sets the maximum willingness to pay, while the Q-intercept sets the maximum quantity demanded (at price $0). Together they determine the demand slope. Higher fixed costs shift ATC up without changing MC, squeezing profit. Increasing the quadratic cost term d makes MC rise faster, reducing optimal output.