Answered: The McDonald's table shows information…

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter3: Your Role As A Consumer

Section: Chapter Questions

Problem 15AA

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Question

The McDonald's table shows information you found out about McDonald’s production capabilities and costs when operating as a monopoly. ( fill it out the table)

As a monopoly, how much should McDonald’s charge for its hamburgers to maximize profit?

What could McDonald’s do to create barriers that would prevent others from entering the markets and would make it harder for remaining hamburger shops to remain in the market?

McDonald's
Quantity
Variable Costs
Fixed Costs
Total Costs
Price
Total Revenue
Profit
Marginal Costs
Marginal Revenue
1,000
500
5,000
5,500
4.00
2,500
1,000
5,000
6,000
3.50
4,000
1,400
5,000
6,400
3.00
9,000
2,400
5,000
7,400
2.00
13,000
3,400
5,000
8,400
1.00
20,000
10,000
5,000
15,000
0.50
45,000
31,250
5,000
36,250
0.30

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