Suppose a pure monopolist is faced with the demand schedule that follows and the same cost data as the competitive producer discussed in question 3 at the end of Chapter 7 . Calculate the missing total-revenue and marginal-revenue amounts, and determine the profit-maximizing price and profit-earning output for this monopolist. What is the monopolist’s profit? Verify your answer graphically and by comparing total revenue and total cost. MarginalRevenueQuantityTotalPriceDemandedRevenue$115$.10083271363455486427378332910 3. Assume the following cost data are for a purely competitiveproducer: LO3AverageAverageAverageTotalFixedVariableTotalMarginalProductCostCostCostCost$45$60.00$45.00$105.0040230.0042.5072.5035320.0040.0060.0030415.0037.5052.5035512.0037.0049.0040610.0037.5047.504578.5738.5747.145587.5040.6348.13656.6743.3350.0075106.0046.5052.50a. At a product price of $56, will this firm produce in theshort run? Why or why not? If it is preferable to produce,what will be the profit-maximizing or loss-minimizingoutput? Explain. What economic profit or loss will thefirm realize per unit of output?b. Answer the relevant questions of 3a assuming productprice is $41.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose a pure monopolist is faced with the demand schedule that follows and the same cost data as the competitive producer discussed in question 3 at the end of Chapter 7 . Calculate the missing total-revenue and marginal-revenue amounts, and determine the profit-maximizing price and profit-earning output for this monopolist. What is the monopolist’s profit? Verify your answer graphically and by comparing total revenue and total cost.

Marginal
Revenue
Quantity
Total
Price
Demanded
Revenue
$115
$.
100
83
2
71
3
63
4
55
48
6
42
7
37
8
33
29
10

3. Assume the following cost data are for a purely competitive
producer: LO3
Average
Average
Average
Total
Fixed
Variable
Total
Marginal
Product
Cost
Cost
Cost
Cost
$45
$60.00
$45.00
$105.00
40
2
30.00
42.50
72.50
35
3
20.00
40.00
60.00
30
4
15.00
37.50
52.50
35
5
12.00
37.00
49.00
40
6
10.00
37.50
47.50
45
7
8.57
38.57
47.14
55
8
7.50
40.63
48.13
65
6.67
43.33
50.00
75
10
6.00
46.50
52.50
a. At a product price of $56, will this firm produce in the
short run? Why or why not? If it is preferable to produce,
what will be the profit-maximizing or loss-minimizing
output? Explain. What economic profit or loss will the
firm realize per unit of output?
b. Answer the relevant questions of 3a assuming product
price is $41.

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