Question

The graph is below.

6.

Refer to Figure 15-6. What area measures the monopolist’s profit?

(K-C)*W

(L-A)*T

(K-B)*W

0.5[(K-C)*(Z-T)]

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20.

Scenario 15-3
A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34.

Refer to Scenario 15-3. At Q = 500, the firm's profit is

-$13,000.

-

$15,000.

-

$17,000.

-$30,000. 21. 21. $download?verifier=uAmnzoFxnCA0vKUuLMALnm$ Refer to Figure 15-9. To maximize total surplus, a benevolent social planner would choose which of the following outcomes? -100 units of output and a price of $20 per unit-150 units of output and a price of $20 per unit--150 units of output and a price of $30 per unit-200 units of output and a price of $20 per unit

Answer 1

Question 6) Answer:- Option iii) (K-B)*W

Question 20) Answer:-  At Q = 500, The profit of monopoly firm is $ 13000. (Option i)

Explanation:- Profit = Total Revenue - Total Cost

Total revenue = Quantity (Q) * Average revenue (AR) = 500 * 60 = $ 30000

Total Cost = Quantity (Q) * Average Cost (AC) = 500 * 34 = $ 17000

Profit = 30000 - 17000 = $ 13000.

Question 21) Answer:- 100 units of output and a price of $20 per unit. (Option i)

Explanation:- To maximize total surplus, a benevolent social planner would produce that level of output where Marginal revenue (MR) = Marginal Cost (MC). At Output of 100 units, Marginal revenue (MR) = Marginal Cost (MC) in the given question. Accordingly, benevolent social planner would choose 100 units of output and a price of $20 per unit.