Homework Answers
Since Sue has pricing power, it makes her a monopolist.
In order to maximize her profits, she will produce Q at the point MR = MC
This occurs at Q = 70 and P = $24
The required table is filled as below:
Q = 70
P = $24
MC = 14
MR = 14
ATC = 18
Economic profit = (P-ATC)Q = (24-18)70 = $420
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