3. Total and a of a AaAa Suppose that Stan Gupta is the only seller of kumquats

Question

3. Total and a of a AaAa Suppose that Stan Gupta is the only seller of kumquats in a small town. The following graph shows the demand and marginal revenue (MR) curves facing Stan. You can use the red rectangle labeled Total Revenue (cross symbols) to compute total revenue at varlous prices along the demand curve. To see the area of the Total Revenue rectangle, scroll over the shaded area with your mouse. You will not be graded on where you place the rectangle. PRICE (Dollars per basket 10 MR Demand s of On the following graph, use the green points (triangle symbol) to plot annual total revenue at prices of s4, 53, $2, and $1 per basket of kumauats. Be sure to use all of the points automatically connect the points. $7, $6, $5, will

Explanation / Answer

Ans: B – Always produce the maximum amount of output possible.

When there is monopoly in market producer will try to get maximum share of the market and gain from that, in order to do that producer will produce more and more output at lower price, since there will be less competition and number of firms would be lesser relatively. Producer will maximize his profits

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