Sol-Motors is the only auto manufacturer in West Lidia, a country that prohibits the importation of cars. The graph below shows the demand and the costs for Sol-Motors. Costs and revenues (in thousands) 33 30 27 24 21 18 15 12 63 15 Price: $ 45 30 60 Quantity per period (in thousands) MC D 75 105, 135, 165 90 120 150 MR coordinates: pt 1 2 x 0 SAVE y 0 a. Add the marginal revenue curve to the graph above (starting at zero). Plot only the end points. b. What are Sol-Motors' profit-maximizing output and price? Output: thousands thousands c. Suppose that the government of Lidia imposes a price ceiling of $9,000 per car. What is the firm's profit-maximizing output now? Profit-maximizing output: [ thousands d. What would be the output if the graph represented a perfectly competitive industry rather than a monopoly? Output: thousands

Sol-Motors is the only auto manufacturer in West Lidia, a country that prohibits the importation of cars. The graph below shows the demand and the costs for Sol-Motors. Costs and revenues (in thousands) 33 30 27 24 21 18 15 12 63 15 Price: $ 45 30 60 Quantity per period (in thousands) MC D 75 105, 135, 165 90 120 150 MR coordinates: pt 1 2 x 0 SAVE y 0 a. Add the marginal revenue curve to the graph above (starting at zero). Plot only the end points. b. What are Sol-Motors' profit-maximizing output and price? Output: thousands thousands c. Suppose that the government of Lidia imposes a price ceiling of $9,000 per car. What is the firm's profit-maximizing output now? Profit-maximizing output: [ thousands d. What would be the output if the graph represented a perfectly competitive industry rather than a monopoly? Output: thousands

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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