MICROECONOMICS (LL)W/ACCESS >IC<
20th Edition
ISBN: 9781308103341
Author: McConnell
Publisher: MCG/CREATE
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Question
Chapter 12.4, Problem 4QQ
To determine
Profit maximizing output.
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Students have asked these similar questions
Demand: P=120-Q Total Cost: TC=Q2
Marginal Revenue: MR=120-2Q Marginal Cost: MC=2Q
For this monopolist, the profit-maximizing price is ________ and the profit-maximizing quantity is _________.
A 40, 80
B 90, 30
C 20, 80
D None of these answers
Suppose a monopolist is currently producing where its variable costs are $1 million. Its fixed costs are $1.5 million. Its revenues are $1.2 million. Should the firm shut down in the short run? Should it leave the industry in the long run?
a
no; yes
b
no; no
c
yes; yes
d
yes; no
Monopoly Market
MC - Marginal Cost
MR - Marginal Revenue
D - Demand
ATC - Average Total Cost
Refer to the figure above. If this monopolist is producing the profit-maximizing quantity and selling it at the profit-maximizing price, the firm's profit will be:
$5
$20
$40
$60
2.5 points
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- A monopolist is faced with the following cost and revenue curves:(picture) a.What is the maximum-profit price and output,total revenue, total cost and profit? b.If the monopolist were ordered to produce 300 units, what would be the market price and how much profit would now be made c.If the monopolist were faced with the same demand, but average costs were constant at £60 per unit, what output would maximise profit? What would be the price now?................................................................................................. (j) How much profit would now be made? ................................................................................... (k) Assume now that the monopolist decides not to maximise profits, but instead sets a price of £40. How much will now be sold? .................................................................................................................................................. (l) What is the marginal revenue at this…arrow_forwardIn the short run, a monopolist will shut down if it is producing a level of output where marginal revenue is equal to short run marginal cost and price is: A. Greater than average total costB. Less than average total costC. Greater than average variable cost D. Less than average variable costarrow_forward
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