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A gadget monopolist has the following average revenue (= market demand) and long-run average cost equations: AR = 17 - 4Q AC = 5 + 1/8Q a. Write the equations of TR, MR, TC, MC, and N (profit). TR = TC = MR = MC = b. Find profit-maximizing output, price, and profit. Q* = P* = n* = c. GRAPH: Graph and label (next page) AR (= D), MR, AC, and MC. Using ATM Rule 1, mark an area that represents total profit with light shading. Using ATM Rule 2, mark with backslashes [\III\] another area that represents profit. d. Calculate the deadweight loss. Mark the area that represents DWL with slashes [/////1. DWL =

A gadget monopolist has the following average revenue (= market demand) and long-run average cost equations: AR = 17 - 4Q AC = 5 + 1/8Q a. Write the equations of TR, MR, TC, MC, and N (profit). TR = TC = MR = MC = b. Find profit-maximizing output, price, and profit. Q* = P* = n* = c. GRAPH: Graph and label (next page) AR (= D), MR, AC, and MC. Using ATM Rule 1, mark an area that represents total profit with light shading. Using ATM Rule 2, mark with backslashes [\III\] another area that represents profit. d. Calculate the deadweight loss. Mark the area that represents DWL with slashes [/////1. DWL =

Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter24: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 15CQ
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A gadget monopolist has the following average revenue (= market demand) and long-run average cost equations: AR = 17 - 4Q AC = 5 + 1/8Q a. Write the equations of TR, MR, TC, MC, and 7 (profit). TR = TC = MR = MC = = b. Find profit-maximizing output, price, and profit. Q* = P* = c. GRAPH: Graph and label (next page) AR (= D), MR, AC, and MC. Using ATM Rule 1, mark an area that represents total profit with light shading. Using ATM Rule 2, mark with backslashes [\II1] another area that represents profit. d. Calculate the deadweight loss. Mark the area that represents DWL with slashes [/////]. DWL =
Transcribed Image Text:A gadget monopolist has the following average revenue (= market demand) and long-run average cost equations: AR = 17 - 4Q AC = 5 + 1/8Q a. Write the equations of TR, MR, TC, MC, and 7 (profit). TR = TC = MR = MC = = b. Find profit-maximizing output, price, and profit. Q* = P* = c. GRAPH: Graph and label (next page) AR (= D), MR, AC, and MC. Using ATM Rule 1, mark an area that represents total profit with light shading. Using ATM Rule 2, mark with backslashes [\II1] another area that represents profit. d. Calculate the deadweight loss. Mark the area that represents DWL with slashes [/////]. DWL =
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