8. Consider the following cost and demand information about a monopoly (in Rs). Fill out the table. Determine how much the firm will produce if it is maximizing profits. What price will the firm charge? TR MR TC| MC Rs Rs. Rs Rs Price Qty i Rs. n units 30 4 25 1 10 21 2 14 18 3 20 14 4 28 9. 5 40 5 54

8. Consider the following cost and demand information about a monopoly (in Rs). Fill out the table. Determine how much the firm will produce if it is maximizing profits. What price will the firm charge? TR MR TC| MC Rs Rs. Rs Rs Price Qty i Rs. n units 30 4 25 1 10 21 2 14 18 3 20 14 4 28 9. 5 40 5 54

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Monopolistic Competition

Section: Chapter Questions

Problem 2CQQ

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MonoMed, having a Patent on production of a medicine, has following Demand and CostSchedule: Price (Rs ): 12 11 10 9 8 7 6 5 4 3 Quantity 0 1 2 3 4 5 6 7 8 9 TVC ( Rs ) 0 13 16 20 25 31 38 46 56 68 Where Fixed Cost is Rs 5 In a Table calculate TR, MR, TC, AVC, ATC and MC at each price. Plot the Demand, Marginal Revenue MR, Average Total Cost ATC, Average Variable Cost AVC and Marginal Cost MC Curves of the Firm in a clearly labelled graph. Calculate the profit earned, if any and show the area on the firm’s graph. How would you define the market structure of MonoMed? What are the characteristics? Does the firm have pricing power? E) What will be the impact of the firm on societal welfare? Would there be welfare loss as compared to a competitive firm? If so, briefly explain. Support your answer using MonoMed’s graph in (b) above.
Table 17-9Only two firms, Acme and Pinnacle, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost. Price Quantity Total Revenues 70 0 0 65 100 6500 60 200 12000 55 300 16500 50 400 20000 45 500 22500 40 600 24000 35 700 24500 30 800 24000 25 900 22500 20 1000 20000 15 1100 16500 10 1200 12000 5 1300 6500 0 1400 0 Refer to Table 17-9. If Acme and Pinnacle operate to jointly maximize profits and agree to share the profit equally, then how much profit will each of them earn? Group of answer choices $9,000 $8,750 $8,000 $6,750
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MonoMed, having a Patent on production of a medicine, has following Demand and Cost Schedule : Price (Rs ) 12 11 10 9 8 7 6 5 4 3 Quantity 0 1 2 3 4 5 6 7 8 9 TVC ( Rs ) 0 13 16 20 25 31 38 46 56 68 Where Fixed Cost is Rs 5 d. Calculate the profit earned, if any and show the area on the firm’s graph.
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