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)?

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

option b

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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