3. The graph below shows a firm's demand, marginal revenue, and marginalcost curves. Find the profit-maximizing level of output and mark it q*. Findthe price the firm should charge and mark it P*.PMCXDMRQuantity4. The Whatsa Widget Company has a monopoly over the sale of widgets in asmall midwestern town. The firm's demand, marginal revenue, marginal cost,and average cost curves are shown below. Find the firm's profit-maximizinglevel of output and the price the firm will charge. Is the firm earning a positiveor a negative profit? Show the firm's profit (or loss) on the graph.PMCXMRDATC

Marginal revenue measures the change in revenue due to a change in quantity produced. Marginal cost measures the change in cost due to a change in quantity produced. A monopoly firm produces at the intersection of the MR and MC curve to maximize profit. ---------------------------------------------------------------------------------------- Question 3: A monopoly firm produces at the intersection of the MR and MC curve to maximize profit. The output and price corresponding to the intersection of MR and MC are q* and P* respectively. Hence, the profit-maximizing level of output and price are q* and P* respectivelyQuestion 4: A monopoly firm produces at the intersection of the MR and MC curve to maximize profit or minimize losses If at optimal output, the price is greater than ATC, then the firm makes a profit. and the price is lower than ATC, then the firm incurs a loss. --------------- The output and price corresponding to the intersection of MR and MC are q* and P* respectively. The ATC corresponding to q* is lower than P*, which means the firm is making a profit. The shaded region represents the profit.

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3. The graph below shows a firm's demand, marginal revenue, and marginal cost curves. Find the profit-maximizing level of output and mark it q*. Find the price the firm should charge and mark it P*. P MC

3. The graph below shows a firm's demand, marginal revenue, and marginal cost curves. Find the profit-maximizing level of output and mark it q. Find the price the firm should charge and mark it P. P MC

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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