A firm faces a demand and cost structure as given in table above: 1. Graph the d

Question

A firm faces a demand and cost structure as given in table above:

1. Graph the demand, the marginal revenue, and the marginal cost curves

2.Determine the profit maximization output and the maximum profit or loss for this firm. Illustrate graphically the profit or loss on your graph

3.Determine de deadweight loss and illustrate it graphically

4.What will be the price and output if the government imposes a ' marginalist cost pricing' to the firm?

5.Determine the revenue maximization output and illustrate graphically the relationship between the demand, the marginal revenue and the total revenue. In what market structure this firm is likely to operate? why?

Quantity Price Total Cost Marginal Cost       Total Revenue   Marginal Revenue    Atc 0 80 80 1 72 82 2 64 88 3 56 100 4 48 124 5 40 164 6 32 208 7 24 268 8 16 340

Explanation / Answer

Quantity Price Total Cost Marginal Cost  (TCN-TCN-1)     Total Revenue (Qty*price)   Marginal Revenue (MRN-MRN-1)   Atc(Total cost/2) 0 80 80 0 40 1 72 82 2 72 72 41 2 64 88 6 128 56 44 3 56 100 12 168 40 50 4 48 124 24 192 24 62 5 40 164 40 200 8 82 6 32 208 44 192 -8 104 7 24 268 60 168 -24 134 8 16 340 72 128 -40 170

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