Answered: Demand and Cost facing Monopolist Total…

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

Suppose a monopolist faces a market demand that is the first two columns in the table below. Also, in the short run, assume that Total Fixed Cost equals $100 and the monopolist has Total Variable Cost according to the table. Find Total Revenue for each price and quantity combination, and then Marginal Revenue as price falls and quantity increases. Fill in the rest of the costs in the table and find profit at each price and quantity combination as the difference between Total Revenue and Total Cost.

Demand and Cost facing Monopolist
Total
Total
Marginal
Marginal Total
Price Quantity
Variable
Profit
Revenue
Revenue
Cost
Cost
Cost
$10 10
$30
$9
20
$50
$8
$60
|$7
40
$80
$6
50
$110
$5
60
$150
$4
70
$210
$3
80
$290
$2
90
$390
30

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