6. The following table shows the demand curve facing a monopolist who produces at aconstant marginal cost of $10. Note that the demand curve is discrete, so only quantitieslisted in the table are feasible.Price1861412086420Quantity04CONDH500+12162024283236a. Calculate the firm's marginal revenue.b.Calculate the firm's profit-maximizing quantity, price, and profit.c. Calculate the equilibrium price and quantity that would prevail in a competitivemarket.

A monopoly firm produces at the intersection of MR and MC curves. A perfectly competitive firm…

The following table shows the demand curve facing a monopolist who produces at a constant marginal cost of $10. Note that the demand curve is discrete, so only quantities isted in the table are feasible.

The following table shows the demand curve facing a monopolist who produces at a constant marginal cost of $10. Note that the demand curve is discrete, so only quantities isted in the table are feasible.

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

6. The following table shows the demand curve facing a monopolist who produces at a
constant marginal cost of $10. Note that the demand curve is discrete, so only quantities
listed in the table are feasible.
Price
18
6
14
12086420
Quantity
0
4
CONDH500+
12
16
20
24
28
32
36
a. Calculate the firm's marginal revenue.
b.
Calculate the firm's profit-maximizing quantity, price, and profit.
c. Calculate the equilibrium price and quantity that would prevail in a competitive
market.

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Step 1: Introduction:

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Step 2: Calculation of marginal revenue:

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Step 3: Calculation of monopoly firm quantity, price and profit.

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Step 4: Calculation of perfectly competitive quantity, price.

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