Question

b) Suppose the single-price monopolist chooses to sell 16 units of output instead of 15 units of output. There are 2 effects that arise because the firm being a single-price monopolist must lower the price on all units itsells. What is the 1* effect and what is the 2nd effect? Hint Read Chapter 10 Overheads. c) What level of output and what price would maximize total revenue for the monopoly? Explain or show clearly how you arrived at your answer. Hint. Although the table stops at 24 units of output, the monopoly can produce and sell more than 24 units of output. d) Would the monopoly want to produce the output and charge the price that you determined in c)? Explain. e) What level of output and what price would maximize the monopoly's economic profit? Explain or show clearly how you arrived at your answer. ) What is the monopoly's economic profit if it produces the level of output and charges the price that you determined in e)?

Answer 1

- - D E F H А Q B Р G AVC 1 MR AR AFC ATC MC 2 0 3 1 с TR 0 71 140 207 272 71 4 69 2. 3 70 40 18 15 5 6 7 72 71 70 69 68 67 66 65 64 63 62 61 10 8 9 11 9 6 10 00 11 12 13 67 65 63 61 59 57 55 53 51 49 47 45 43 41 39 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 14 70 55 42.67 35.75 30.8 27.17 24.14 22.13 21 20.4 20.27 20.58 21.15 21.93 22.93 24.13 25.35 26.72 28.21 29.75 31.48 33.32 60 71 60 70 30 69 20 68 15 67 12 66 65 8.57143 64 7.5 63 6.66667 62 6 61 5.45455 60 5 59 4.61538 58 4.28571 57 4 56 3.75 55 3.52941 54 3.33333 53 3.15789 52 3 51 2.85714 50 2.72727 49 2.6087 2.5 130 85 62.67 50.75 42.8 37.17 32.71 29.63 27.67 26.4 25.73 25.58 25.77 26.21 26.93 27.88 28.88 30.06 31.37 32.75 34.33 36.05 335 396 455 512 567 620 671 720 767 812 855 896 935 972 1007 1040 1071 1100 1127 1152 15 16 17 18 19 20 21 22 23 24 25 26 27 59 58 57 56 55 54 53 52 51 12 15 19 24 28 32 37 42 45 50 55 37 35 33 31 29 27 59 66 50 72 78 49 48 25 48 84 Sheet1 +

B part is related to your chapter10 which i don't know about.