Assume the ATC equals four dollars this monopolist will earn how much profit The graph illustrates the economic concepts of supply and demand, alongside marginal revenue (MR).### Graph Description:**Axes:**- The vertical axis represents price levels.- The horizontal axis represents quantity.**Curves:**- **Supply Curve:** Upward sloping from left to right, indicating that as the price increases, the quantity supplied increases.- **Demand Curve:** Downward sloping from left to right, showing that as the price decreases, the quantity demanded increases.- **Marginal Revenue (MR) Line:** Horizontal, indicating constant marginal revenue across different quantities.**Equilibrium Point:**- The intersection of the supply and demand curves is the equilibrium point, where the quantity supplied equals the quantity demanded.**Key Points on the Axes:**- **Prices:** Marked at intervals, with specific labels at 2, 8, 9, and 11.- **Quantities:** Marked at intervals, with specific labels at 11, 14, and 20.This graph is a fundamental representation of market behaviors, illustrating how various quantities and price levels interact to form market equilibrium. The MR line is often used in contexts involving firm-level analysis, especially in monopoly or imperfect competition scenarios, where understanding the additional revenue from selling one more unit is critical.

Answered: Assume the ATC equals four dollars this…

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Economics

Assume the ATC equals four dollars this monopolist will earn how much profit

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Assume the ATC equals four dollars this monopolist will earn how much profit

The graph illustrates the economic concepts of supply and demand, alongside marginal revenue (MR).

### Graph Description:

**Axes:**
- The vertical axis represents price levels.
- The horizontal axis represents quantity.

**Curves:**
- **Supply Curve:** Upward sloping from left to right, indicating that as the price increases, the quantity supplied increases.
- **Demand Curve:** Downward sloping from left to right, showing that as the price decreases, the quantity demanded increases.
- **Marginal Revenue (MR) Line:** Horizontal, indicating constant marginal revenue across different quantities.

**Equilibrium Point:**
- The intersection of the supply and demand curves is the equilibrium point, where the quantity supplied equals the quantity demanded.

**Key Points on the Axes:**
- **Prices:** Marked at intervals, with specific labels at 2, 8, 9, and 11.
- **Quantities:** Marked at intervals, with specific labels at 11, 14, and 20.

This graph is a fundamental representation of market behaviors, illustrating how various quantities and price levels interact to form market equilibrium. The MR line is often used in contexts involving firm-level analysis, especially in monopoly or imperfect competition scenarios, where understanding the additional revenue from selling one more unit is critical.

Definition Definition Total cost of producing a certain quantity of a good, divided by the quantity produced. It is the sum of all costs (fixed and variable) required to produce one unit of output.

Expert Solution

Step 1

Supply curve is the marginal cost of the firm.

The monopolist will try to earn maximum profit. It will be maximized when the quantity produced is at a point where MR=MC.

So, in the graph, we can see that MR and the supply(MC) curve are intersecting at quantity level of 11 units.

The corresponding price level on the demand curve is 11.

So, Q=11

P=11

Total Revenue=P*Q=121

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