Question

1) The profit maximizing output for this monopolist is ________ units (numeric).

2) The profit maximizing price this monopolist will charge is $ _______(Numeric).

3) The total revenue (TR) this monopolist will receive when it maximizes its profit is $ _______(Numeric).

4) The average total cost (ATC) this monopolist will experience when it maximizes its profit is $ _______(Numeric).

5) The total cost (TC) this monopolist will experience when it maximizes its profit is $ _______(Numeric).

6) This monopolist earns $________profit (numeric and sign) when it maximizes its profit.

P ATC 20 MC 17 15 13 9 6 D 0 40 50 55 90 Q MR

Answer 1

The answer is provided in the images attached.

P AIC MC E IS 3 Sot B H 6 A ID D 90 40 MR 50 55 os Prefit manimizes at MR=MC at point A. It is 1) Poeft meumizing output = 40 units 2) For profit maromizing price, we extend the Point A vestically upwards, it meets the demand curve at point B. Point B shows profit marimizing price = $15 3- Revenud - Boxifer kazimizing potent 3) Revenue - Prefat marumizing price A Profit mahimatay. nuful = 15840 $ 600 Total sevenue : Area of OCBD -ISX40= 600

4) We can the the get awe dage total cost by extending pomie A wkese MR-MC) bexically upwards #u 7 meets ATC curve which is pont E. ATC = $17 Jotal cost = Area of OFED =17840 $680 = Total cost = Ave a profit marimizing quanting = 12 X UO = $680 6) Profit Total Cost Total revenue - 600 680 = $-80 - Profit= Area of OCBD Area of OFED = Area of ECBE = 600 - 680 = $ - 80