For the monopoly represented by the figure to the right, at what quantity is its revenue maximized? (Hint: Revenue is maximize where MR = 0.) Why is revenue maximized at a larger quantity than profit? Show the revenue curve. In the figure to the right, let D be demand and MR be marginal revenue. The quantity at which revenue is maximized is Q= 10 units. (Enter your response rounded to the nearest whole number.) Revenue is maximized at a larger quantity than profit because OA. costs are decreasing in output. OB. marginal costs can be negative. c. marginal revenue is decreasing in output. O D. revenue is greater than profit. OE. profit is decreasing in output. Using the three-point curved line drawing tool, graph the monopoly's revenue curve. Label this curve 'R.' Carefully follow the instructions above, and only draw the required objects. o, $ per unit p. $ per unit 30 28- 26- 24- 22- 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 0- 0 100T 90- 80- 70- 60- 50- 40- 30- 20- 10- 0- 0 MR 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Q, Quantity 2 4 6 +H 8 10 12 14 16 18 20 22 24 26 28 30 Q, Quantity

For the monopoly represented by the figure to the right, at what quantity is its revenue maximized? (Hint: Revenue is maximize where MR = 0.) Why is revenue maximized at a larger quantity than profit? Show the revenue curve. In the figure to the right, let D be demand and MR be marginal revenue. The quantity at which revenue is maximized is Q= 10 units. (Enter your response rounded to the nearest whole number.) Revenue is maximized at a larger quantity than profit because OA. costs are decreasing in output. OB. marginal costs can be negative. c. marginal revenue is decreasing in output. O D. revenue is greater than profit. OE. profit is decreasing in output. Using the three-point curved line drawing tool, graph the monopoly's revenue curve. Label this curve 'R.' Carefully follow the instructions above, and only draw the required objects. o, $ per unit p. $ per unit 30 28- 26- 24- 22- 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 0- 0 100T 90- 80- 70- 60- 50- 40- 30- 20- 10- 0- 0 MR 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Q, Quantity 2 4 6 +H 8 10 12 14 16 18 20 22 24 26 28 30 Q, Quantity

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Perfect Competition

It is the structure of the market that is said to exist when with many buyers and sellers exchanging similar commodities and its price is fixed by the market forces, demand, and supply, and a single firm cannot cause an impact over the price or market value of the homogenous product. This structure of the market is called perfect competition.

Question

For the monopoly represented by the figure to the right, at what quantity is its
revenue maximized?
(Hint: Revenue is maximize where MR = 0.)
Why is revenue maximized at a larger quantity than profit? Show the revenue
curve.
In the figure to the right, let D be demand and MR be marginal revenue.
The quantity at which revenue is maximized is
Q = 10 units. (Enter your response rounded to the nearest whole number.)
Revenue is maximized at a larger quantity than profit because
A. costs are decreasing in output.
OB. marginal costs can be negative.
C. marginal revenue is decreasing in output.
OD.
D. revenue is greater than profit.
OE. profit is decreasing in output.
Using the three-point curved line drawing tool, graph the monopoly's revenue
curve. Label this curve 'R.'
Carefully follow the instructions above, and only draw the required objects.
p. $ per unit
30
28-
26-
24-
22-
20-
18-
16-
14-
12-
10-
8-
6-
4-
2-
0-
024
100-
90-
80-
70-
60-
50-
40-
30-
20-
10-
0-
6
MR
D
8
10 12 14 16 18 20 22 24 26 28 30
Q, Quantity
024 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Q, Quantity

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If, in a monopoly market, the demand for a product is p = 195 − 0.10x and the revenue function is R = px, where x is the number of units sold, what price will maximize revenue? (Round your answer to the nearest cent.)
The inverse demand curve a monopoly faces is p=120-2Q. The firm's cost curve is C(Q) = 40 +6Q. What is the profit-maximizing solution? The profit-maximizing quantity is 28.50. (Round your answer to two decimal places.) The profit-maximizing price is $63.00. (round your answer to two decimal places.) What is the firm's economic profit? The firm earns a profit of $ 1584.50. (round your answer to two decimal places.) How does your answer change if C(Q)= 100+6Q? The increase in fixed cost OA. has no effect on the equilibrium quantity, but the equilibrium price increases and profit decreases. B. causes the firm to increase both the price and quantity, and profit increases. OC. has no effect on the equilibrium quantity, but the equilibrium price increases and profit increases. D. has no effect on the equilibrium price and quantity, but profit will decrease.
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