Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 12.4, Problem 4QQ
To determine
Profit maximizing output.
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QUESTION 1
A. The total cost function for a monopolist is given by TC = 44,000 + 180Q + 0.03Q² and the demand
function is P = 420 – 0.06Q per unit of output.
i.
What is the profit maximising level of output?
ii.
Calculate the profit maximizing price.
iii.
Calculate total profit at the profit maximising level of output.
A monopolist has a demand curve given by Q=100-P and a total cost curve given by TC= Q2 + 16.
a.Find the monopolist’s profit maximizing quantity and price. Indicate them on the graph.
b.How much economic profit will the monopolist earn?
c. Calculate the price elasticity of demand at the equilibrium price level.
If a monopolist's marginal revenue is $3.00 and its marginal cost is $4.00, it will increase its profits by:
A. reducing output and raising price
B. Reducing both output and price
C. Increasing both output and price
D. Raising price while keeping output unchanged
Chapter 12 Solutions
Microeconomics
Ch. 12.4 - The MR curve lies below the demand curve in this...Ch. 12.4 - Prob. 2QQCh. 12.4 - Prob. 3QQCh. 12.4 - Prob. 4QQCh. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQ
Ch. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - 10. LAST WORD Using Big Data to set personalized...Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - Prob. 4PCh. 12 - Prob. 5P
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- A monopolist A.) Has perfectly inelastic demand curve B.) Is a price taker C.) Can always increase price to increase economic profit D.) Is rhe price maker E.) Has no control over the market price of the product it sellsarrow_forwardWhen a monopolist switches from charging a singleprice to practicing perfect price discrimination, itreducesa. the quantity produced.b. the firm’s profit.c. consumer surplus.d. total surplus.arrow_forwardExercise 3.3. Suppose a profit-maximizing monopolist is producing 800 units of output and is charging a price of $40 per unit. a. If the elasticity of demand for the product is -2, find the marginal cost of the last unit produced. b. What is the firm's percentage markup of price over marginal cost? c. Suppose that the average cost of the last unit produced is $15 and the firm's fixed cost is $2000. Find the firm's profit.arrow_forward
- For a monopolist to produce one more unit of output, Select one: a. the price must be equal to the marginal cost b. the difference of total revenue gained and total revenue lost must be greater than zero c. the price must be equal to the average variable cost. d. demand must be in the in inelastic range of the demand curve e. the difference of the price and marginal revenue must be equal to zeroarrow_forwardCurrently, a monopolist’s profit-maximizing output is 400 units per week and it sells its output at a price of $60 per unit. The firm’s total costs are $10,000 per week. The firm is maximizing its profit, and it earns $40 in extra revenue from the sale of the last unit produced each week. a. What is firm's ATC.arrow_forward30. A monopolist will spend resources to advertise its product so long as A) net profits increase.B) gross profits increase.C) demand increases.D) total revenue increases.arrow_forward
- Currently, a monopolist's profit-maximizing output is 400 units per week and it sells its output at a price of S60 per unit. The firm's total costs are $10,000 per week. The firm is maximizing its profit, and it earns $40 in extra revenue from the sale of the last unit produced each week. a. What are the firm's weekly economic profits? b. What is the firm's marginal cost? c. What is the firm's average total cost?arrow_forwardIt is possible for a monopolist's to earn economic profits even in the long run due to: a. its barriers to the entry of other firms. b. the nature of the monopolist's product. c. its practice of third-degree price discrimination.arrow_forwardSuppose a monopolist’s profit-maximizing output is 200 units per week and that the firm sells its output at a price of $60 per unit. The firm has total costs of $9,000 per week. Assume the monopolist is maximizing its profit and earns $30 per unit from the sale of the last unit produced each week. a. What are the firm's weekly economic profits? $ b. What is the firm's marginal cost? $ c. What is the firm's average total cost?arrow_forward
- 1. The table shows the demand schedule of a monopolist. Calculate marginal revenue and fill in the revenue column in the table. Assume that output can only be sold in integer amounts (i.e., 1 unit, 2 units, etc.). 2. Once you have filled in marginal revenue, identify the quantity produced by the monopolist in this market.arrow_forwarda. At what output rate and price does the monopolist operate? b. In equilibrium, approximately what is the firm’s total cost and total revenue? c. What is the firm’s economic profit or loss in equilibrium?arrow_forwardCurrently, a monopolist’s profit-maximizing output is 400 units per week and it sells its output at a price of $60 per unit. The firm’s total costs are $10,000 per week. The firm is maximizing its profit, and it earns $40 in extra revenue from the sale of the last unit produced each week. a. What are the firm's MC.arrow_forward
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