2. The figure below shows demand, marginal revenue, and short-run cost curves for a monopoly: Price and cost (dollars) 30 20 10 0 2,000 MR 4,000 Quantity D a. How much should the firm produce? What price should it charge? b. What is the firm's profit (loss)? c. Should this firm produce or shut down? Explain. d. If the firm shuts down in the short run, how much will it lose? 6,000 SMC ATC AVC

2. The figure below shows demand, marginal revenue, and short-run cost curves for a monopoly: Price and cost (dollars) 30 20 10 0 2,000 MR 4,000 Quantity D a. How much should the firm produce? What price should it charge? b. What is the firm's profit (loss)? c. Should this firm produce or shut down? Explain. d. If the firm shuts down in the short run, how much will it lose? 6,000 SMC ATC AVC

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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