The graph shows the relevant curves for a profit maximizing monopolist. Assume that it is possible for the firm to produce a quantity that is not a whole number. D What quantity will the firm produce? MC 20.59 - 30.36 units 14.95. 13.01 AC 8.92 What price will the firm charge? Price, cost ($)
The graph shows the relevant curves for a profit maximizing monopolist. Assume that it is possible for the firm to produce a quantity that is not a whole number. D What quantity will the firm produce? MC 20.59 - 30.36 units 14.95. 13.01 AC 8.92 What price will the firm charge? Price, cost ($)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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What is the firm's profit?
![The graph shows the relevant curves for a profit-maximizing monopolist. Assume that it is possible for the firm to produce a quantity that is not a whole number.
**Questions and Answers:**
1. What quantity will the firm produce?
- **Answer:** 30.36 units
2. What price will the firm charge?
- **Answer:** $20.59
3. What is the firm's profit?
- **Answer:** (Box left blank)
**Graph Explanation:**
- **Axes:**
- The x-axis represents the quantity produced.
- The y-axis represents price or cost in dollars.
- **Curves:**
- **D (Demand Curve):** Downward sloping, indicating that higher prices lead to lower quantities demanded.
- **MR (Marginal Revenue):** Downward sloping and below the demand curve, reflecting the monopolist's additional revenue from selling one more unit.
- **MC (Marginal Cost):** Upward sloping, representing the additional cost of producing one more unit.
- **AC (Average Cost):** U-shaped curve, illustrating the cost per unit at different production levels.
- **Equilibrium Point:**
- The quantity 30.36 is determined where MR equals MC, the point of profit maximization.
- The associated price at this quantity, derived from the demand curve, is $20.59.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fce2fe1d4-950d-4375-97c2-1318e6e01dc0%2F9ecb65bb-afcf-4815-9dfb-b1e4f84278d7%2F3w38iq8_processed.png&w=3840&q=75)
Transcribed Image Text:The graph shows the relevant curves for a profit-maximizing monopolist. Assume that it is possible for the firm to produce a quantity that is not a whole number.
**Questions and Answers:**
1. What quantity will the firm produce?
- **Answer:** 30.36 units
2. What price will the firm charge?
- **Answer:** $20.59
3. What is the firm's profit?
- **Answer:** (Box left blank)
**Graph Explanation:**
- **Axes:**
- The x-axis represents the quantity produced.
- The y-axis represents price or cost in dollars.
- **Curves:**
- **D (Demand Curve):** Downward sloping, indicating that higher prices lead to lower quantities demanded.
- **MR (Marginal Revenue):** Downward sloping and below the demand curve, reflecting the monopolist's additional revenue from selling one more unit.
- **MC (Marginal Cost):** Upward sloping, representing the additional cost of producing one more unit.
- **AC (Average Cost):** U-shaped curve, illustrating the cost per unit at different production levels.
- **Equilibrium Point:**
- The quantity 30.36 is determined where MR equals MC, the point of profit maximization.
- The associated price at this quantity, derived from the demand curve, is $20.59.
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