AT&T; Wi-Fi 6:00 PM 61 Done Photo IL. Long Ones 1. Here is a demand curve for co

Question

AT&T; Wi-Fi 6:00 PM 61 Done Photo IL. Long Ones 1. Here is a demand curve for coconuts. 17:7711(1) 15 14 13 11 10 9 8.7 10 11 lf there is only one firm producing coconuts and the marginal costof producing coconuts is constant at$7 what price will they set, how many will they sell, what will their profit be and what will consumer surplus be? Will this be efficient? Show this on a b. If the market for coconuts is perfectly competitive and all firms face a constant marginal cost of $7 what will the price be, how many will be produced and what will consumer surplus be? Will this be efficient? Show this on a graph.

Explanation / Answer

for a monopolist

mr = mc ( profit maximising qty)

mr = mc = 7

AT q=5 , MR = MC

p = 11

profits = p*q - mc*q

=11*5 -7*5 = 20

for perfect competition

p = mc

p = 7

q = 9

yes it will be efficient .

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