Question #4: Using the following graph to answer the following questions: 100 MC ATC AVC 1,000 2.000 3,00 4.000 5,000 MC is marginal cost, MR is marginal revenue, ATC is average total cost, AVC is average variable cost and D is the demand curve. a. By looking at this graph, what can you say about the market power of this firm? Is it a perfect competition or a monopoly? Explain. b. To maximize the profit, how many units should the firm produce? At what price? c. Based on your answer, what is the total revenue? Total costs? Total profit? Total fixed cost? d. Will you operate this firm in the short run? Long run? Briefly explain. e. How do you measure monopoly power? smop oo pue senuna

Question #4: Using the following graph to answer the following questions: 100 MC ATC AVC 1,000 2.000 3,00 4.000 5,000 MC is marginal cost, MR is marginal revenue, ATC is average total cost, AVC is average variable cost and D is the demand curve. a. By looking at this graph, what can you say about the market power of this firm? Is it a perfect competition or a monopoly? Explain. b. To maximize the profit, how many units should the firm produce? At what price? c. Based on your answer, what is the total revenue? Total costs? Total profit? Total fixed cost? d. Will you operate this firm in the short run? Long run? Briefly explain. e. How do you measure monopoly power? smop oo pue senuna

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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