A monopolist faces a demand curve P = 100 – 4Qand initially faces total costTC = 12Q.(a) Calculate the profit-maximizing monopolyquantity and price, and compute the monopolist'stotal revenue and profits at the optimal price.(b) Suppose that the monopolist's total increasesto TC = 44Q. Verify that the monopolist's totalrevenue goes down.c) Suppose that all firms in a perfectly competitiveequilibrium had a combined total cost T C = 12Q.Find the long-run perfectly competitive industryprice and quantity. Also what are the combinedindustry profits and revenue. (Hint: the supplycurve is just the marginal cost)(d) Suppose that all firms' total costs increased to TC = 44Q. Verify that the increase in marginal costcauses total industry revenue to go up.

In economics, profit maximization is the short run or long run process by which a firm may determine…

ndustry profits and revenue. (Hint: the supply curve is just the marginal cost) d) Suppose that all firms' total costs increased to T C = 44Q. Verify that the increase in marginal cost causes total industry revenue to go up.

ndustry profits and revenue. (Hint: the supply curve is just the marginal cost) d) Suppose that all firms' total costs increased to T C = 44Q. Verify that the increase in marginal cost causes total industry revenue to go up.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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