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The demand function P for maximising a profit monopolist is given by P=274-x², while the marginal cost is 4+3x for x units of commodity. The consumer surplus is

Solution

✅ Correct Option: 4

The demand function is P=274−x2P = 274 - x^2 and the marginal cost is MC=4+3xMC = 4 + 3x.

A monopolist maximizes profit where Marginal Revenue equals Marginal Cost.

Total Revenue is:

TR=P×xTR = P \times x

TR=(274−x2)×xTR = (274 - x^2) \times x

TR=274x−x3TR = 274x - x^3

Marginal Revenue is the derivative of Total Revenue:

MR=d(TR)dxMR = \frac{d(TR)}{dx}

MR=274−3x2MR = 274 - 3x^2


Setting MR=MCMR = MC:

274−3x2=4+3x274 - 3x^2 = 4 + 3x

274−4=3x2+3x274 - 4 = 3x^2 + 3x

270=3x2+3x270 = 3x^2 + 3x

90=x2+x90 = x^2 + x

x2+x−90=0x^2 + x - 90 = 0

(x+10)(x−9)=0(x + 10)(x - 9) = 0

Taking the positive value: x=9x = 9


The price at x=9x = 9:

P=274−x2P = 274 - x^2

P=274−(9)2P = 274 - (9)^2

P=274−81P = 274 - 81

P=193P = 193


Consumer Surplus is the area between the demand curve and the price level:

CS=∫09(274−x2)dx−(193×9)CS = \int_0^9 (274 - x^2) dx - (193 \times 9)

Evaluating the integral:

∫(274−x2)dx=274x−x33\int (274 - x^2) dx = 274x - \frac{x^3}{3}

Applying limits from 0 to 9:

=[274(9)−(9)33]−[274(0)−(0)33]= \left[274(9) - \frac{(9)^3}{3}\right] - \left[274(0) - \frac{(0)^3}{3}\right]

=2466−7293= 2466 - \frac{729}{3}

=2466−243= 2466 - 243

=2223= 2223

Therefore:

CS=2223−(193×9)CS = 2223 - (193 \times 9)

CS=2223−1737CS = 2223 - 1737

CS=486CS = 486

The consumer surplus is 486486.

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