**Educational Content: Monopoly Economics****Graph Explanation:**The graph illustrates the demand, marginal revenue, and marginal cost functions for a monopoly. - The **blue line** represents the demand curve (P), which is downward sloping, indicating that as quantity increases, the price decreases.- The **red line** is the marginal revenue (MR) curve. It lies below the demand curve and also slopes downward.- The **green dashed line** represents both the marginal cost (MC) and average cost (AC) curve, as stated in the description. This line is horizontal, indicating constant marginal and average costs for all quantities.**Key Concept:**- In this scenario, the marginal cost is equal to the average cost for all quantities (MC(Q) = AC(Q)).**Task:**Calculate the monopoly's profits if the monopoly perfectly price discriminates.**Note:**In the context of perfect price discrimination, the monopoly can charge each consumer the maximum price they are willing to pay, capturing all consumer surplus as additional profit.

Price 180 168 156 144 132 120 108 96 84 72 60 48 36 24 12 0 0 36 72 108 144 180 P 216 252 288 324 360 396 432 468 Quantity MR <---MC=AC A monopoly face the following demand, marginal revenue and marginal cost functions Note that in this case MC (Q) = AC (Q) for all Q. Calculate the monopoly's profits if the monopoly perfectly price discriminates 504

Price 180 168 156 144 132 120 108 96 84 72 60 48 36 24 12 0 0 36 72 108 144 180 P 216 252 288 324 360 396 432 468 Quantity MR <---MC=AC A monopoly face the following demand, marginal revenue and marginal cost functions Note that in this case MC (Q) = AC (Q) for all Q. Calculate the monopoly's profits if the monopoly perfectly price discriminates 504

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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