Amonopoly faces the demand curve 14 P=12-1.00. 134 where Pis measured in dollars per unit and Qin thousands of units. The monopolist has a constant average cost of $4 00 per unit 12 11- 104 Draw the average and marginal revenue curves and the average and marginal cost curves 1) Using the Iine drawing tool, draw the average revenue curve and label it'AR 2) Using the line drawing tool, draw the marginal revenue curve and label it MR 3) Using the line drawing tool, draw the average cost curve and label it 'AC 4) Using the ine drawing tool, draw the marginal cost curve and label MC 3. Carefully follow the instructiona above, and only draw the required objecta What are the monopolist's profit-maximizing price and quantity? 10 12 14 16 18 20 22 24 Quantity (thounands) The monopoly's profit-maximizing quantity is 54 thousand units (Enter all responses rounded to two decimal places.) The proft-maximizing price is s What is the resulting profi? Profit is s 16 thousand Calculate the degree of monopoly power using the Lener Index The degree of monopoly power is 50 A govemment regulatory agency sets a price celling of 56.00 per unit What quantity will be produced, and what will the fim's profit be? The monopoly with the price celling will produce thousand units of output
Amonopoly faces the demand curve 14 P=12-1.00. 134 where Pis measured in dollars per unit and Qin thousands of units. The monopolist has a constant average cost of $4 00 per unit 12 11- 104 Draw the average and marginal revenue curves and the average and marginal cost curves 1) Using the Iine drawing tool, draw the average revenue curve and label it'AR 2) Using the line drawing tool, draw the marginal revenue curve and label it MR 3) Using the line drawing tool, draw the average cost curve and label it 'AC 4) Using the ine drawing tool, draw the marginal cost curve and label MC 3. Carefully follow the instructiona above, and only draw the required objecta What are the monopolist's profit-maximizing price and quantity? 10 12 14 16 18 20 22 24 Quantity (thounands) The monopoly's profit-maximizing quantity is 54 thousand units (Enter all responses rounded to two decimal places.) The proft-maximizing price is s What is the resulting profi? Profit is s 16 thousand Calculate the degree of monopoly power using the Lener Index The degree of monopoly power is 50 A govemment regulatory agency sets a price celling of 56.00 per unit What quantity will be produced, and what will the fim's profit be? The monopoly with the price celling will produce thousand units of output
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A monopoly faces the demand curve
14
P= 12-100.
13-
12
where P is measured in dollars per unit and Q in thousands of units, The monopolist has a
constant average cost of $4.00 per unit
114
104
Draw the average and marginal revenue curves and the average and marginal cost curves
1) Using the line drawing tool, draw the average revenue curve and label it 'AR
2) Using the line drawing tool, draw the marginal revenue curve and label it MR'.
3.) Using the line drawing tool, draw the average cost curve and label it 'AC
4) Using the line drawing tool, draw the marginal cost curve and label t "MC
12
Carefully follow the instructions above, and only draw the required objects
6610 12 14 16 16 20 22 24 2
Quantity (thousands)
What are the monopolist's profit-maximizing price and quantity?
The monopoly's proft-maximizing quantity is 54 thousand units (Enter al responseo rounded to
hwo decimal places.)
The profit-maximizing price is s8
What is the resulting profit?
Profit is 5 16 thousand.
Calculate the degree of monopoly power using the Lemer Index
The degree of monopoly power is 0.50
A govemment regulatory agency sets a price celling of 56.00 per unit. What quantity will be
produced, and what will the firm's profit be?
The monopoly with the price celing will produce thousand units of output
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