Based on the graph ancwer the qestions A. for the monopolist i. Profit maximizin

Question

Based on the graph ancwer the qestions

A. for the monopolist

i. Profit maximizing output=

ii. ATC=

iii. AR=

iv. Price =

v. Total Revenue

vi. Total cost

vii. Profit

B. For the perfectly competitive firm

i. Profit maximizing output=

ii. ATC=

iii. AR=

iv. Price =

v. Total Revenue

vi. Total cost

vii. Profit

C. Discuss the differences you observed in your answers beetwen monopolist and perfectly competitive firm

Please show your work and the formula you used with final correct answer.

Thank you for your help

Explanation / Answer

For B For the competitive firm (a price taker), we can write: Revenue (TR) = P x Q (note: as we discuss markets, we will use the notation ‘Q, Qs, Qd’ for output levels rather than ‘X’ as in previous lectures) and Marginal Revenue (MR) = dTR/dQ = P! Thus an alternative expression for profit maximization for a competitive firm is: P = MC. (note also: P = MR) described as where the revenue from selling one more unit of output (P, MR) is exactly equal to the cost of producing that last unit of output (MC). If MR > MC then additions to revenue exceed the additions to cost (via the production and sale of one more unit of output) and the firm will be able to increase profits by selling that additional unit. If the opposite is true, MR

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