Question

PART II MONOPOLY 10 POINTS The chart below depicts the current monopoly market for cadmium. The price is per pound (lb) and the quantities are in millions of lbs. Price Market Total Marginal Total cost Average Marginal revenue revenue demand total cost Cos S90 $80 S70 S60 S50 $40 S30 $20 S10 100 200 300 400 500 600 700 800 8000 11000 13000 14000 16000 21000 27000 35000 45000 A) Draw the market demand curve, marginal revenue and marginal cost curves B) What is the equilibrium price of cadmium in the market? C) How much cadium will be produced at equilibrium in this market? D) What is the profit eamed by this monopolist? E) What is the profit per unit camed by the monopolist?

Answer 1

the chart bel010 clopidy, 一fhe Current monopoly market Domand Revterue 9o tSo 100 000 1000 3000 2000 boc 1000 5000 6000 2000 Sod-4000 8000 2001000 1300 6S 000 400 50 400 00006000 40 500 20000 2100o 27000 46 4-2 45 50 56.25 4:000 2000 6 130 | 6c0 | 18000 $20 700 4-0003 o 8o0 o0 45000 ー6000 Margihal levenue nereaken Tolal Revenue hhan one more Unt Sold Juanttg η Crocu e }り.taled rgina oduod

A) Dra the market go To 60 So 40 30 20 Market domand /o Curve 100 200 300 LyDD 500 600 7003 MC 8000 6000 1000 2OUD o0 200 0 40o goa 600 7oo sea -2000 -4000 -6000

the eqbriom estabihad Ahure he erginal revenue s aqual -to the maginal Cst. hx hagresy Alhen Markot mard400 and Preis 550 C) The quantlity comandod k 400 D) profit= Total Revenue _Thlor 50 400)- /6000 200oo -l600o 14-000 2 2400o 4 006O