09+Monopoly

Monopoly Problem Set 1 Use the following information to answer questions 1 through 4: The table below shows data for the production of Apples for an individual firm operating as a monopoly. Quantity of Apples Price Total Costs 0 600 3000 10 550 3750 20 500 4750 30 450 6000 40 400 8500 50 350 12500 60 300 20000 70 250 32000 80 200 43500 1. Given this data, complete the table: Quantity of Apples Total Revenue (TR) Profit Marginal Revenue (MR) Marginal Costs (MC) 0 0 -3000 - - 10 5500 1750 550 75 20 10000 5250 450 100 30 13500 7500 350 125 1 This assignment by Lumen Learning is licensed under a Creative commons Attribution 4.0 International License. You can access an alternative means to plotting points at https://www.desmos.com/calculator .

40 16000 7500 250 250 50 175000 5000 150 400 2. At what quantity are marginal revenues equal to marginal costs? 40

Use the following information to answer questions 5 through 9: The graph below shows the demand curve and cost data for a firm operating as a monopolist. 5. Curve 1 shows: a. Marginal Revenue 6. Curve 2 shows: a. Demand Curve

7. Curve 3 shows: a. Marginal Costs 8. The profit maximizing quantity for this monopolist is: a. 6.25 9. What price will the monopolist set in order to maximize profits (or minimize losses)? a. 11.88

Use the following information to answer questions 11 through 14: The graph below shows demand curve and cost data for a firm operating as a monopolist. In addition, Curve 4 shows average total costs (ATC). 11. Suppose that the government decided to regulate this monopolist by requiring the firm to produce at the point where the Marginal Cost curve intersects with the demand curve. What is the quantity under this marginal cost pricing? a. 4.84 12. Suppose that the government decided to regulate this monopolist by requiring the firm to produce at the point where the Marginal Cost curve intersects with the demand curve. What is the price under this marginal cost pricing? a. 12.58

13. Compared to the profit maximizing quantity for this monopolist, the marginal cost pricing quantity is a. Bigger 14. Compared to the profit maximizing price for this monopolist, the marginal cost pricing price is a. Lower