This Question: 2 pts 16 of 25 (12 complete) > This Quiz: 40 pts possib Use the g
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This Question: 2 pts 16 of 25 (12 complete) > This Quiz: 40 pts possib Use the graph at right to answer the following questions 10.00 What is the monopolist's profit-maximizing output? MC At the profit-maximizing output rate, what is the average total cost? $ '001 ATC 6.0 6004 At the profit-maximizing output rate, what is the .5.75 average revenue? 4.00 4.00 3.00 2 00- 1.00- 0.00 At the profit-maximizing output rate, what is the monopolist's total cost? $ At the profit-maximizing output rate, what is the monopolist's total revenue? MR 10,000 What is the maximum profit? SL Units per Period Enter your answer in each of the answer boxes. Type here to search DX F2 F3 F4 F5 F6 Esc IF1Explanation / Answer
a. what is the monopolist's profit- maximizing output?
5000 units.
The point of intersection of MR and MC or when MR= MC.
And when the line is extended on to the demand curve it gives the profit maximizing out put for a monopolist.
b. At the profit maximizing output rate, what are average total cost and average revenue?
Q= 5000 units.
Monopoly prcie charge.
P= $6
ATC= Average total cost
ATC= Tota Cost / Output.
ATC at 5000 units is $5.25
Total Cost= ATC x Output
= $5.25x 5000
Total Cost = $26250
ATC= 26250/5000 =5.25
Total Revenue= Price x Ourput
= $6 x 5000
= 30,000
= $30000
Average revenue= TR / Output
= 30000/5000
Average revenue = $6
c. at the profit maximizing output rate , what are the monopolist's total cost and total revenue?
Q= 5000 units.
Monopoly prcie charge.
P= $6
ATC= Average total cost
ATC= Tota Cost / Output.
ATC at 5000 units is $5.25
Total Cost= ATC x Output
= $5.25 x 5000
Total Cost = $26250
Total Revenue= Price x Ourput
= $6 x 5000
Total Revenue= $30000
d. what is the maximum profit?
Maximum profit is generated at monopoly price, where MR= MC
At, P= $6 and Q= 5000 units
Profit= Total Revenue - Total Cost
Total Revenue= Price x Ourput
= $6 x 5000
Total Revenue= $30000
Total Cost= ATC x Output
= $5.25 x 5000
Total Cost = $26250
Profit= $30000 - $ 26250
Profit = $3750
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