question # 24-3 brief explanation Key Terms and Conceptscartel (588)monopolist (585)natural monopoly (586)Problems24-1. An international coffee cartel has established a priceabove the perfectly competitive price. The number ofcountries not in the cartel has grown in recent years,however. Explain the likely effect of this trend on theprospects for maintaining a successful cartel.24-2. Discuss the difference in the price elasticity of demandfor an individual firm in a perfectly competitive indus-try as compared with a monopolist. Explain, in eco-nomic terms, why the price elasticities are different.24-3. The following table depicts the daily output, price,and costs of the only dry cleaner located near the cam-pus of a small college town in a remote location. Thedry cleaner is effectively a monopolist.Output(suitscleaned)02345678a. Compute revenues and profits at each output level.b. What is the profit-maximizing level of output?price differentiation (599)price discrimination (598)Price per Suit($)8.007.507.006.506.005.505.004.504.00Total Costs($)3.006.008.5010.5011.5013.5016.0019.0024.0024-4. Given the information in Problem 24-3, calculate thedry cleaner's marginal revenue and marginal cost ateach output level. Based on marginal analysis, what isthe profit-maximizing level of output?24-5. A manager of a monopoly firm notices that the firm isproducing output at a rate at which average total costis falling but is not at its minimum feasible point. Themanager argues that surely the firm must not be max-imizing its economic profits. Is this argument correct?Dollars per Unit24-6. Referring to the accompanying diagram, answer thefollowing questions.8.00a. What is monopolist's profit-maximizing output?b. At the profit-maximizing output rate, what are themonopolist's average total cost and average revenue?c. At the profit-maximizing output rate, what are themonopolist's total cost and total revenue?d. What is the maximum profit?6.00CHAPTER 24 Monopoly5.004.50price searcher (593)tariffs (588)3.005,000605MRMCATC8,000Units per Period24-7. Using the diagram for Problem 24-6, suppose that themarginal cost and average total cost curves also illus-trate the horizontal summation of the firms in a com-petitive industry in the long run. What would themarket price and equilibrium output be if the marketwere competitive? Explain the economic cost to soci-ety of allowing a monopoly to exist in this industry.24-8. The marginal revenue curve of a monopoly producercrosses its marginal cost curve at $30 per unit, whichcorresponds to an output level of 2 million units. Theprice that consumers are willing and able to pay for thisoutput is $40 per unit. If it produces this output level, thefirm's average total cost is $43 per unit, and its averagefixed cost is $8 per unit. What is this monopoly produc-er's profit-maximizing (loss-minimizing) output level?WHAT ARE THE FIRM'S ECONO-MIC PROFITS (OR ECONOMICLOSSES? EXPLAIN

Solution for question # 24-3Price times quantity gives the total revenue of the firm at each level…

24-3. The following table depicts the daily output, price, and costs of the only dry cleaner located near the cam- pus of a small college town in a remote location. The dry cleaner is effectively a monopolist. a. Compute revenues and profits at each output level. b. What is the profit-maximizing level of output?