Question

question 3

can someone explain

how is total revenue calculated in this question? also questions a,b,c

Paragraph Styles Editing 3. Assume that a pure monopolist is able to engage in perfect price discrimination and sell each unit of the product at a price equal to the maximum price the buyer of that unit of the product would be willing to pay. Complete the table below by computing total revenue and marginal revenue for the price discriminating monopolist. Total revenue $ Marginal revenue Marginal cost Quantity 0 1 2 3 4 5 6 7 8 9 10 Price $34 32 30 28 26 24 22 20 18 Total cost $ 20 36 46 50 54 56 64 80 100 128 160 16 14 (a) What is the marginal revenue that the discriminating monopolist obtains from the sale of each additional unit? (b) How many units would be produced and what would be the total revenue for the perfectly discriminating monopolist? What would economic profits be? (s. Compare the economic effects of price discrimination to no price discrimination for the pure monopolist in terms of profits and the level of output.

Answer 1

Price = AR (Average revenue)

Total revenue = AR*Q (Quantity)

Quantity	Price	Total Revenue	Marginal Revenue	Total cost	Marginal cost
0	$34	0	N/A	$20	N/A
1	32	32	32	36	16
2	30	60	28	46	10
3	28	84	24	50	4
4	26	104	20	54	4
5	24	120	16	56	2
6	22	132	12	64	8
7	20	140	8	80	16
8	18	144	4	100	20
9	16	144	0	128	28
10	14	140	-4	160	32

b. 9 units will be produce and the total revenue is 144.

economic profit = TR-TC = 144 - 128 = 16

c. Price discrimination benefits a monopolist with higher profit on the other hand if there is no price discrimination profit rate will be less. In the long run and short run price discimination bring super normal profit whereas, no price discrimination will bring normal profit in the long run.