EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 12, Problem 5DQ
To determine
Critically evaluation of the statements on different markets.
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Ignore AFC and AVC
2. Suppose a pure monopolist faces the following demand schedule and the same cost data as the competitive producer discussed in
problem 4 at the end of Chapter 10. Calculate the missing TR and MR amounts, and determine the profit-maximizing price and
profit-maximizing output for this monopolist. What is the monopolist's profit? Verify your answer graphically and by comparing total
revenue and total cost. LO11.4
Average
Total
Average
Variable
Average
Marginal
Product
Fixed Cost
Cost
Total Cost
Cost
0
$45
1
$60.00
$45.00
$105.00
40
2
30.00
42.50
72.50
35
3
20.00
40.00
60.00
30
4
15.00
37.50
52.50
35
5
12.00
37.00
49.00
40
6
10.00
37.50
47.50
45
7
8.57
38.57
47.14
55
8
7.50
40.63
48.13
65
9
6.67
43.33
50.00
75
10
6.00
46.50
52.50
Price Quantity Demanded Total Revenue Marginal Revenue
$115
83
63
55
48
42
29
2 % 522332
100
0
1
2
3
4
5
6
7
37
8
9
10
$
The table presents the demand schedule and marginal costs facing a monopolist producer.
Fill in the total revenue and marginal revenue columns.
What is the profit-maximizing level of output?
What price will the monopolist charge for the quantity in part b?
Note:-
Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.
Chapter 12 Solutions
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- Suppose that a monopolist faces linear demand given by Q(p)=90-3"p The monopolist also pays a marginal cost of $2 for each unit produced. What is the price that the monopolist will set to maximize its profits? O 16.5 O 15 O 16 O 15.5arrow_forwardof aboul $92,00 Exhibit 9-4: A Monopoly Total Quantity Total Fixed Variable Price Demanded Cost Cost $100 $20 $0 90 1 $20 20 80 $20 48 70 $20 78 60 4 $20 110 50 $20 150 Refer to Exhibit 9-4. At an output level of 3 units, the monopolist earns a total profits of about O $80.00 $92.00 O $112.00 O$110.00 2. 3. 5.arrow_forwardExhibit 9-4: A Monopoly Total Quantity Total Fixed Variable Price Demanded Cost Cost $100 $30 $0 90 1 $30 20 80 $30 48 70 3 $30 78 60 $30 110 50 $30 150 Refer to Exhibit 9-4. At an output level of 4 units, the monopolist earns a total profits of about $70.00 O $100.00 O $82.00 $102.00arrow_forward
- 6arrow_forwardFigure 15-6 Price Marginal Cost $20 15 10 Demand 100 150 200 Quantity Marginal Revenue Refer to Figure 15-6. To maximize its profit, a monopolist would • choose which of the following outcomes? O100 units of output and a price of $20 per unit 200 units of output and a price of $20 per unit 150 units of output and a price of $15 per unit 100 units of output and a price of $10 per unit « Previous Nextarrow_forwardAssuming that the monopolistic competitor faces the demand and costs depicted below and finds the profit maximizing level of output, what will be the firm's profit? 36 32 28 24 20 16 12 8 4 O O 1 O MC1 ATC₁ FAVC₁ Select one: O a. $8 b. $-32 c. $-64 d. $12 x Incorrect. The profit maximizing output is 4 units where Marginal cost equals marginal revenue. At that output, use the demand curve to find the price and calculate total revenue. At that output, use the average cost curve to find the average cost and calculate total cost. Then calculate profit = total revenue - total cost. MR1 D₁ 2 3 4 5 6 7 8 9arrow_forward
- 3. Consider a market in which a monopolist would charge at a price of $10 for a particular good. Assume now the market is currently dominated by a pair of Bertrand duopolists who produce identical goods and compete on price in a one-shot game. They both face a marginal cost of $5. They start with colluding and agreeing to charge the monopoly price of $10 in an effort to maximize their profits. In equilibrium, the market price of the good will be.... (a) Over $10 (b) $10 (c) Between $5 and $10 (d) $5 (e) Less than $5 (f) None of the above Answer: 3d. A price war will break out, lowering the price to $5.arrow_forwardPlease please explain all subparts. I will really really upvote. Thanksarrow_forwardА. What is the reason for a monopolist to practice price discrimination? Describe one form of price discrimination in which a monopolist produces the same output as a perfect competitive industry. Explain clearly why the monopolist does so instead of producing the same output as a single-price monopoly. В. С. Movie theaters charge a lower price for morning shows and a higher price for evening shows. With a clearly labeled figure, show and explain the form of price discrimination practiced by movie theaters.arrow_forward
- 9a and 9b?arrow_forwardTable 3 Quantity Price 1 2 3 4 2N 4567 7 8 9 10 O 10 O 17 14 35 O 15 29 23 17 8 Total revenue 35 64 120 99 80 Average revenue 32 11 Marginal revenue Refer to Table 3. What price would the monopolist charge in order to sell 8 units of the product? 29 17 11 -1 -7 -13arrow_forwardOnly typed answerarrow_forward
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