Question

Suppose a pure monopolist is faced with the cost data shown in the table on the left and the demand schedule shown on the rig
b. What is the profit-maximizing price? What is the profit-maximizing output for this monopolist? units c. What is the monopo
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Answer #1
P Q TR MR
115 0 0
100 1 100 100
83 2 166 66
71 3 213 47
63 4 252 39
55 5 275 23
48 6 288 13
42 7 294 6
37 8 296 2
33 9 297 1
29 10 290 -7

b) Setting MC=MR, the profit maximizing price = 55

output = 5

c) Profits = P-ATC*Q = (55-49)*5 = 30

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