Economics Suppose a monopoly operates two shops along a one-mile street of 3,000 consumers, has marginal cost of c = 250 and the fixed cost Fof each shop is 50,000. Also, consumers only buy one unit and have a reservation value of V =1,000. Consumers also incur there-and-back travel costs of t = 120 per mile. What is total profit if the monopolist serves the entire market with two shops? Select one: а. 1.1 million b. 2.1 million С. 1.8 million d. 1.4 million
Economics Suppose a monopoly operates two shops along a one-mile street of 3,000 consumers, has marginal cost of c = 250 and the fixed cost Fof each shop is 50,000. Also, consumers only buy one unit and have a reservation value of V =1,000. Consumers also incur there-and-back travel costs of t = 120 per mile. What is total profit if the monopolist serves the entire market with two shops? Select one: а. 1.1 million b. 2.1 million С. 1.8 million d. 1.4 million
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Your Question:
![Economics
Suppose a monopoly operates two shops along a
one-mile street of 3,000 consumers, has marginal
cost of c = 250 and the fixed cost Fof each shop is
50,000. Also, consumers only buy one unit and
have a reservation value of V =1,000. Consumers
also incur there-and-back travel costs of t = 120
per mile. What is total profit if the monopolist
serves the entire market with two shops?
Select one:
а.
1.1 million
b.
2.1 million
С.
1.8 million
d.
1.4 million](https://content.bartleby.com/qna-images/question/ef201a18-cf43-42fa-93df-3bed452d1863/a24fd626-e7c8-47a8-844a-c0bf968dbe6e/4b3h16_thumbnail.jpeg)
Transcribed Image Text:Economics
Suppose a monopoly operates two shops along a
one-mile street of 3,000 consumers, has marginal
cost of c = 250 and the fixed cost Fof each shop is
50,000. Also, consumers only buy one unit and
have a reservation value of V =1,000. Consumers
also incur there-and-back travel costs of t = 120
per mile. What is total profit if the monopolist
serves the entire market with two shops?
Select one:
а.
1.1 million
b.
2.1 million
С.
1.8 million
d.
1.4 million
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