1. The following table shows demand and cost data for a pure monopolist. Quantit
ID: 1185905 • Letter: 1
Question
1. The following table shows demand and cost data for a pure monopolist.
Quantity demanded
Price
Total revenue
Marginal revenue
Total cost
Marginal cost
0
$17
$_____
$10
1
16
_____
$_____
18
$_____
2
15
_____
_____
23
_____
3
14
_____
_____
25
_____
4
13
_____
_____
27
_____
5
12
_____
_____
28
_____
6
11
_____
_____
32
_____
7
10
_____
_____
40
_____
8
9
_____
_____
50
_____
9
8
_____
_____
64
_____
10
7
_____
_____
80
_____
a. Complete the table by filling in the columns for total revenue, marginal revenue, and marginal cost.
b. Answer the next three questions using the data you calculated in the table.
(1) What output will the monopolist produce? _____________
(2) What price will the monopolist charge? _____________
(3) What total profit will the monopolist receive at the profit-maximizing level of output? _____________
Quantity demanded
Price
Total revenue
Marginal revenue
Total cost
Marginal cost
0
$17
$_____
$10
1
16
_____
$_____
18
$_____
2
15
_____
_____
23
_____
3
14
_____
_____
25
_____
4
13
_____
_____
27
_____
5
12
_____
_____
28
_____
6
11
_____
_____
32
_____
7
10
_____
_____
40
_____
8
9
_____
_____
50
_____
9
8
_____
_____
64
_____
10
7
_____
_____
80
_____
Explanation / Answer
Hi,
Please find the answers as follows:
Part A:
Part B:
1) Monpolist will produce 6 units of output
2) Monopolist will charge $11
3) Total profit will be 66 - 32 = $34
Thanks
10
1 16 16 16 18 8 2 15 30 14 23 5 3 14 42 12 25 2 4 13 52 10 27 2 5 12 60 8 28 1 6 11 66 6 32 4 7 10 70 4 40 8 8 9 72 2 50 10 9 8 72 0 64 14 10 7 70 -2 80 16
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.