Suppose the figure represents the market for diamond necklaces, where the company that supplies necklaces is a monopoly because it is the only firm with access to diamond mines. 260.00- 240.00- 220.00 MC What is the firm's profit-maximizing price and quantity? What are profits? 200.00- 180.00- 1.) Use the point drawing tool to indicate the profit-maximizing price and quantity for the monopoly. Label this point 'Profit-maximizing'. 2.) Use the rectangle drawing tool to shade in economic profits. Label this shaded area 'Profit'. Carefully follow the instructions above, and only draw the required objects. - - 160.00- 140.00- 120.00- Price and cost (per necklace) 100.00- 80.00- 60.00- ATC 40.00- 20.00- MR D 0.00+ 0 2 4 6 8 10 12 14 16 18 20 22 24 26 Quantity (diamond necklaces)

Suppose the figure represents the market for diamond necklaces, where the company that supplies necklaces is a monopoly because it is the only firm with access to diamond mines. 260.00- 240.00- 220.00 MC What is the firm's profit-maximizing price and quantity? What are profits? 200.00- 180.00- 1.) Use the point drawing tool to indicate the profit-maximizing price and quantity for the monopoly. Label this point 'Profit-maximizing'. 2.) Use the rectangle drawing tool to shade in economic profits. Label this shaded area 'Profit'. Carefully follow the instructions above, and only draw the required objects. - - 160.00- 140.00- 120.00- Price and cost (per necklace) 100.00- 80.00- 60.00- ATC 40.00- 20.00- MR D 0.00+ 0 2 4 6 8 10 12 14 16 18 20 22 24 26 Quantity (diamond necklaces)

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 5SCQ: Suppose demand for a monopolys product falls 50 that its profit-maximizing price is below average...

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