Scenario Use the following information to answer questions 16-19. The graph below shows the market demand for computers in a small country. To develop a domestic computer industry, the government prohibits imports of computers and gives a single local firm the sole right to produce and sell computers (that is, it is a legal monopoly). The demand curve shows the local demand for computers. The cost curves show the marginal cost (MC) and average total cost (ATC) of the single producer. The graph also shows the marginal revenue (MR) curve faced by this firm. Price per computer (Dollars) $3500- $3000 $2500 $2000 $1500- $1000 $500 0 10 ..MC.. ATC MR Demand 20 30 40 50 60 70 Quantity of computers (number per year)

Scenario Use the following information to answer questions 16-19. The graph below shows the market demand for computers in a small country. To develop a domestic computer industry, the government prohibits imports of computers and gives a single local firm the sole right to produce and sell computers (that is, it is a legal monopoly). The demand curve shows the local demand for computers. The cost curves show the marginal cost (MC) and average total cost (ATC) of the single producer. The graph also shows the marginal revenue (MR) curve faced by this firm. Price per computer (Dollars) $3500- $3000 $2500 $2000 $1500- $1000 $500 0 10 ..MC.. ATC MR Demand 20 30 40 50 60 70 Quantity of computers (number per year)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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