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• Demand: P = 100 - 20 • Fixed cost = 100 ● Marginal cost = 20 a. Calculate the following: i. The marginal revenue curve: MR = iii. The profit-maximizing price: P* = $ Total cost at Q* from part ii: TC = $ b. Calculate markup, price minus marginal cost: $ ii. The level of output where MR = MC: Q* = iv. Total revenue at Q*: TR = $ v. What entrepreneurs really care about-profit: $

• Demand: P = 100 - 20 • Fixed cost = 100 ● Marginal cost = 20 a. Calculate the following: i. The marginal revenue curve: MR = iii. The profit-maximizing price: P* = $ Total cost at Q* from part ii: TC = $ b. Calculate markup, price minus marginal cost: $ ii. The level of output where MR = MC: Q* = iv. Total revenue at Q*: TR = $ v. What entrepreneurs really care about-profit: $

Survey Of Economics
Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter8: Monopoly
Section: Chapter Questions
Problem 6SQP
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Consider this situation for a monopolist. • Demand: P = 100 - 20 • Fixed cost = 100 • Marginal cost = 20 a. Calculate the following: i. The marginal revenue curve: MR = iii. The profit-maximizing price: P* = $ Total cost at Q* from part ii: TC = $ b. Calculate markup, price minus marginal cost: $ Now calculate markup as a percentage markup, that is, as 100 x P-MC MC ii. The level of output where MR = MC: Q* = iv. Total revenue at Q*: TR = $ v. What entrepreneurs really care about-profit: $ Percentage markup: %
Transcribed Image Text:Consider this situation for a monopolist. • Demand: P = 100 - 20 • Fixed cost = 100 • Marginal cost = 20 a. Calculate the following: i. The marginal revenue curve: MR = iii. The profit-maximizing price: P* = $ Total cost at Q* from part ii: TC = $ b. Calculate markup, price minus marginal cost: $ Now calculate markup as a percentage markup, that is, as 100 x P-MC MC ii. The level of output where MR = MC: Q* = iv. Total revenue at Q*: TR = $ v. What entrepreneurs really care about-profit: $ Percentage markup: %
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