The graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. a. Place point P, at the profit maximizing price and quantity assuming that the monopolist can only charge a single price. 100 95 90 85 b. What are the profits of the firm if it charges a single price? 1225 $ Correct Answer Suppose the monopolist is able to price discriminate between two groups successfully by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above? 1500 Incorrect Answer Price and Costs($) 80 75 70 65 60 P 55 50 45 40 35 30 25 20 15 10 5 0 MR D MC 05 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Correct Answer Quantity
The graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. a. Place point P, at the profit maximizing price and quantity assuming that the monopolist can only charge a single price. 100 95 90 85 b. What are the profits of the firm if it charges a single price? 1225 $ Correct Answer Suppose the monopolist is able to price discriminate between two groups successfully by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above? 1500 Incorrect Answer Price and Costs($) 80 75 70 65 60 P 55 50 45 40 35 30 25 20 15 10 5 0 MR D MC 05 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Correct Answer Quantity
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.1P
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Transcribed Image Text:The graph depicts the marginal revenue (MR), demand (D),
and marginal cost (MC) curves for a monopoly.
a. Place point P, at the profit maximizing price and quantity
assuming that the monopolist can only charge a single price.
100
95
90
85
b. What are the profits of the firm if it charges a single price?
1225
$
Correct Answer
Suppose the monopolist is able to price discriminate between
two groups successfully by charging one group $60 and
charging $35 to the other group.
c. What are the firm's profits if it charges the two prices as
mentioned above?
1500
Incorrect Answer
Price and Costs($)
80
75
70
65
60
P
55
50
45
40
35
30
25
20
15
10
5
0
MR
D
MC
05 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100
Correct Answer
Quantity
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