# ToalCost ofPrice per Quantity DemandedProduction(dollars)\$530540550560575595625Unit(units)\$858075706560101213141516A monopoly producer of foreign language translation software faces a demand and cost structureas given in Table 15-1.1) Refer to Table 15-1. What is the marginal revenue from the sale of the 12th unit?A) S75B) S50C) S20D) -S52) Refer to Table 15-1. What is the firm's profit-maximizing output and what is the price chargedto sell this output?A) P S85: 0 10B) P-380; Q = 11C) P S70: Q 13D)P- S65: 0-143) Refer to Table 15-1. What is the amount of the firm's profit?A) S335B) S350C) S880D) \$910

Question

How do you do number 1

Step 1

It is given that,

The above table depicts the demand and cost structures of foreign language translator software of a monopoly producer.

To find: The MR of 12th unit, the firm’s profit maximization price and output, and the amount of profit

We know that,

Marginal Revenue is the additional revenue that a firm can generate by selling an additional unit of output in the market; therefore, the MR of 12th unit can be derived by subtracting the 11th unit Total Revenue (TR) from 12th unit TR i.e.  TR (12th unit) – TR (11th unit). Thus, referring to the modified table 15-1, we can write:

MR (12th unit) = \$900 - \$880

= \$20

Therefore, for the above question (1) the correct option is (C).

Step 2

Now, we have to determine the profit maximizing price and output

We know that,

At the profit maximizing level, the amount of profit is maximum; therefore, referring to the modified table 15-1 we can conclude that the profit is maximum (\$350) at two prices i.e. \$70 and \$75 where the profit-maximizing quantities are 13 and 12 units respectively. Ho...

### Want to see the full answer?

See Solution

#### Want to see this answer and more?

Our solutions are written by experts, many with advanced degrees, and available 24/7

See Solution
Tagged in