Respond to the question with a concise and accurate answer, along with a clear explanation and step-by-step solution, or risk receiving a downvote. 4eBookPrintReferencesStudy ProblemSol-Motors is the only auto manufacturer in West Lidia, a country that prohibits the importation of cars. The graph below shows thedemand and the costs for Sol-Motors.Costs and revenues (in thousands)333027242118151245 75 105,30 60 90Quantity per period (in thousands)15MCD120135150165ToolsSavedMRHell a. Add the marginal revenue curve to the graph above (starting at zero). Plot only the end points.b. What are Sol-Motors' profit-maximizing output and price?Output:thousandsPrice: $thousandsc. Suppose that the government of Lidia imposes a price ceiling of $9,000 per car. What is the firm's profit-maximizing output now?Profit-maximizing output:d. What would be the output if the graph represented a perfectly competitive industry rather than a monopoly?Output:thousandsthousands

Profit maximizing output is achieved at the point where the marginal revenue of selling a product is…

Sol-Motors is the only auto manufacturer in West Lidia, a country that prohibits the importation of cars. The graph below shows the demand and the costs for Sol-Motors. nues (in thousands) 30 27 24 21 18 MC D Tools MR

Sol-Motors is the only auto manufacturer in West Lidia, a country that prohibits the importation of cars. The graph below shows the demand and the costs for Sol-Motors. nues (in thousands) 30 27 24 21 18 MC D Tools MR

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Respond to the question with a concise and accurate answer, along with a clear explanation and step-by-step solution, or risk receiving a downvote.

4
eBook
Print
References
Study Problem
Sol-Motors is the only auto manufacturer in West Lidia, a country that prohibits the importation of cars. The graph below shows the
demand and the costs for Sol-Motors.
Costs and revenues (in thousands)
33
30
27
24
21
18
15
12
45 75 105,
30 60 90
Quantity per period (in thousands)
15
MC
D
120135150165
Tools
Saved
MR
Hell

a. Add the marginal revenue curve to the graph above (starting at zero). Plot only the end points.
b. What are Sol-Motors' profit-maximizing output and price?
Output:
thousands
Price: $
thousands
c. Suppose that the government of Lidia imposes a price ceiling of $9,000 per car. What is the firm's profit-maximizing output now?
Profit-maximizing output:
d. What would be the output if the graph represented a perfectly competitive industry rather than a monopoly?
Output:
thousands
thousands

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