Question

The following table shows the demand curve facing a monopolist who produces at a constant marginal cost of $8.00. Show all work.

TR MR Price Quantity 180 16 14 8 12 12 10 16 20 6 24 4 28 2 32 0 36 8

What is the firm's profit? Profit equals $____________ What would the equilibrium price and quantity be in a competitive industry?

Answer 1

Price	Quantity	TR	MR	MC	ATC	TC	Profit
18	0	0
16	4	64	16	8	8	32	32
14	8	112	12	8	8	64	48
12	12	144	8	8	8	96	48
10	16	160	4	8	8	128	32
8	20	160	0	8	8	160	0
6	24	144	-4	8	8	192	-48
4	28	112	-8	8	8	224	-112
2	32	64	-12	8	8	256	-192
0	36	0	-16	8	8	288	-288

here the MC is constant so it will be equal to ATC.

What is the firm's profit? Profit equals $48.

explanation:

profit=TR-TC

=144-(8*12)

=144-96

=48.

What would the equilibrium price and quantity be in a competitive industry?

Price=12

quantity=12

Explanation:

firm maximizes its profit where MR=MC.

so at quantity and price 12, firm maximizes its profit as MR=MC.