Question

MR MC ATC dol 1 2 3 4 5 6 7 8 Price 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 TR 0 64.00 124.00 180.00 232.00 280

3 points Based on the above table, the average total cost at the profit maximizing quantity is: * 52 364 75.71 оо 40 3 points

XYZ is a monopoly because: 3 points MR=MC=P MR<P MR>P The price is high

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Answer #1

1)The correct option is D. None of the above

The above option is correct because the monopolist should not shutdown the production. Monopolist will only shutdown the production when MC exceeds price but In the above given table none such condition is there.

2). The correct option is C. 75.71

The profit is maximum when MR equals to MC. so the average total cost at the profit-maximizing Quantity is 75.75.

3) the correct option is D. 40

As as we know, the profit-maximizing quantity is obtained when MR is equal to MC, so considering the above table we could conclude that the profit maximizing quantity is 40.

4). The correct option is D. That is 7

The price set at the point when the profit will be maximum (MR=MC),

5) the correct option is B. MR<P

XYZ is Monopoly because because the marginal revenue is less than price .

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Answer #2

SOLUTION :



First question :



ANSWER : 2nd Option : The above monopolist should shutdown since total cost 

Is higher than total revenue.


(For all levels of production, TC > TR, it means there is loss all along)



Second question :



ANSWER : 3rd Option : 75.71 


(For maximum profit(minimum loss), MR = MC and it is so at  ATC of 75.71)



3rd question :



ANSWER : 4th Option : 7  


(For maximum profit(minimum loss), MR = MC and it is so at  output of 7)



4th Question :


ANSWER : 2nd Option : 52  


(At maximum profit(minimum loss output of 7. Price is set at 52))



5th question :



ANSWER :  2nd Option : MR < P 


(At any output, P > MR for a monopolist being a price maker)

answered by: Tulsiram Garg
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