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Suppose a monopolists cost and revenue information is given by p = 20 – 0.002q TR(q) = 20q – 0.002q? MR = 20 – 0.004q Demand TR MR TC = 160 + 0.025q² MC = 0.05q TC MC Any other relation you need you can derive yourself. Show all of your work. a. What is this single price monopolist's profit maximizing output choice? b. What price should this monopolist charge for their output? c. What is the average cost per unit at the profit maximizing level of output? d. Is the monopolist earning a loss (profit)? Either way show the loss (profit)?

Suppose a monopolists cost and revenue information is given by p = 20 – 0.002q TR(q) = 20q – 0.002q? MR = 20 – 0.004q Demand TR MR TC = 160 + 0.025q² MC = 0.05q TC MC Any other relation you need you can derive yourself. Show all of your work. a. What is this single price monopolist's profit maximizing output choice? b. What price should this monopolist charge for their output? c. What is the average cost per unit at the profit maximizing level of output? d. Is the monopolist earning a loss (profit)? Either way show the loss (profit)?

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter9: Monopoly
Section: Chapter Questions
Problem 33P: Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the...
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Suppose a monopolists cost and revenue information is given by p = 20 – 0.002q Demand TR(q) = 20q – 0.002q? MR = 20 – 0.004q TR MR TC = 160 + 0.025q² MC = 0.05q TC MC Any other relation you need you can derive yourself. Show all of your work. a. What is this single price monopolist's profit maximizing output choice? b. What price should this monopolist charge for their output? c. What is the average cost per unit at the profit maximizing level of output? d. Is the monopolist earning a loss (profit)? Either way show the loss (profit)?
Transcribed Image Text:Suppose a monopolists cost and revenue information is given by p = 20 – 0.002q Demand TR(q) = 20q – 0.002q? MR = 20 – 0.004q TR MR TC = 160 + 0.025q² MC = 0.05q TC MC Any other relation you need you can derive yourself. Show all of your work. a. What is this single price monopolist's profit maximizing output choice? b. What price should this monopolist charge for their output? c. What is the average cost per unit at the profit maximizing level of output? d. Is the monopolist earning a loss (profit)? Either way show the loss (profit)?
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