Question

MonoHWa [email protected] On the left is your monopoly 1f you handle your customers PD without any discrimination and maximize your profits, then This 48 44 42 where MC crosses MR below this will be your Q of applied to the PD (price, demand) curve will result in price of Swhich at that quantity is above ATC of s and is your profit per unit. This profit per unit the MC MR quantity results in a non-discriminatory profit of by S MR MC 36 34 ATC 30 S2f society is offended by your profits, they may require you to release a Q where P ATC which happens over Q of and results in zero profits (no loss, no profit). 18 100 120 90 110 3lt may be argued by the govenment or in court that every unit before 1100 ought to be produced because its minimum benefit (P) is greater than its cost (MC) and satisfies allocative efficiency. Producing where MC P happens at Q. but results in ATC of $ which is higher than current P of $ by $each (which multiplied by corresponding Q) makes for a total loss of $ 4)lt may also be argued that ATC must be minimized, which happens where MC-ATC, and satisfy technological/productive eff. However when ATC MC, ATC equals $which is much higher than corresponding price of $The difference between ATC-P makes for a per unit loss of S 5)Price discrimination maximizes times corresponding Q of for a total loss of $ profits by releasing the allocatively efficient quantity of 110Q. Average price equals ((highest P +alloc Plalloc Q) which is ($60+30)2=minus corresponding ATC of $ for a per unit profit of $ 110Q for a total discriminatory profit of $ (Now do two new examples here and on the back!) ATC profit TR P Q TC MC satisfies 120 -10 1 130 90 2 150 60 3 180 220 40 270 5 30 nothing satisfied 330 20 6 and profit while TR equals 120+90+ Under discrimination Q so TC= 1

I need assistance filling the table on the bottom, along with the last line. I have solved the top portion. any help will be much appreciated.

Answer 1

Using the formula TR= Q×P, we can find the TR schedule-

TR = P × Q

120 × 1 = 120

90 × 2 = 180

60 × 3 = 180

40 × 4 = 160

30 × 5 = 150

20 × 6 = 120

MC can be calculated as a ratio of change in TC by change in quantity. As the change in quantity is equal to 1 at each level, we only need to calculate change in TC to find MC.

Also, AC is the ratio of TC by quantity.

TC	MC	ATC
130	-	130/1=130
150	150 -130= 20	150/2= 75
180	180-150= 30	180/3= 60
220	220-180= 40	220/4= 55
270	270-220= 50	270/5= 54
330	330-270= 60	330/6= 55

Now, profit is calculated by subtracting TC from TR

TR	TC	PROFIT = TR-TC
120	130	-10
180	150	30
180	180	0
160	220	-60
150	270	-120
120	330	-110

Now, allocative efficiency is satisfied at a point where MC= P. This happens only at 4 unit of quantity. All other units do not satisfy the allocative efficiency.

Thus, under discrimination, Q=4, TC=220, TR=160 and Profit is equal to -60.