2. Assume a firm under Monopoly in the Short Run. MC ATC MR Quantity Where, As $
ID: 1118821 • Letter: 2
Question
2. Assume a firm under Monopoly in the Short Run. MC ATC MR Quantity Where, As $10, B= $8, C= $7, M=10(units), N=12, Q#14, R=18 A. The profit-maximizing output for this monopoly firm is ( units. B. The profit-maximizing price for this firm is s C. At the profit-maximizing output, TR(Total revenue) is represented by area ( ) and TC(total cost) is represented by area ( D. At the profit-maximizing output, the firm's economic profit per unit will be $(). E. At the profit-maximizing output, the firm's total economic profit will be s(),which is represented by area ( F. At output R, economic profits will be s () G. At output M, TC(total cost) will be $( and TR will be s(Explanation / Answer
Answer
a)
the monopoly produces where MR=MC
Q=M=10 units
b)
the price is found from demand curve at the production level
P=A=$10
c)
TR=P*Q=10*10=$100=area 0AFM
TC=ATC*Q=10*8=$80=area 0BGM
d)
Profit per unit=P-ATC
=10-8=$2 per unit profit
e)
Profit=per unit profit*Q=2*10=$20
=the area ABGF
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