**Monopolistic Pricing Strategy for Laptop Sales**Refer to the table shown below, which presents the demand schedule for a firm that has a monopoly on the sale of laptops.| Price of Laptops | Quantity Demanded per Year ||------------------|----------------------------|| $1250 | 25 || $1000 | 50 || $750 | 75 || $500 | 100 || $250 | 125 |If the marginal cost of producing laptops is $250, regardless of how many laptops are produced, and the monopolist aims to maximize profit, it should set the price of laptops at:- ⬜ $500- ⬜ $1000- ⬜ $750- ⬜ $250**Explanation:**The table provided shows different price points for laptops and the corresponding quantity demanded per year at each price point. This data can be used by a monopolistic firm to determine the optimal price to set in order to maximize profits.To find the profit-maximizing price, consider both the revenue at each price point and the costs:1. **Revenue Calculation**: Revenue is calculated by multiplying the price by the quantity demanded. 2. **Cost Calculation**: The cost is determined by the marginal cost and the quantity produced. Since the marginal cost is constant at $250, the total cost for any quantity $Q$ is $250 \times Q$.3. **Profit Calculation**: Profit is typically calculated as Revenue minus Cost.By calculating this for each potential price point, the firm can determine which price maximizes profits.Graphs and calculations might be used to visualize and determine the optimal price. However, using the table values directly, you can find out the optimal price by using the demand and cost relationship outlined above.

Monopoly refers to a market system in which there is only one vendor, each of whom has a unique…

Quantity Demanded per Year 1250 25 1000 50 750 75 500 100 250 125 Refer to the table shown, which shows the demand schedule for a firm that has a monopoly on the sale of laptops. If the marginal cost of producing laptops is $250 no matter how many laptops are produced and the monopolist seeks to maximize profit, it should set the price of laptops at: Price of laptops

Quantity Demanded per Year 1250 25 1000 50 750 75 500 100 250 125 Refer to the table shown, which shows the demand schedule for a firm that has a monopoly on the sale of laptops. If the marginal cost of producing laptops is $250 no matter how many laptops are produced and the monopolist seeks to maximize profit, it should set the price of laptops at: Price of laptops

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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