Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter P3, Problem 6KC
To determine
The market condition of profit of the monopolist.
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Students have asked these similar questions
Key Idea: A monopolist sets MR = MC in order to maximize profit in the short run.
Explain why the monopolist’s demand and marginal revenue curves are not the same.
Graphically show a monopolist’s short-run profit-maximizing price and quantity.
Explain what determines whether a firm is a price taker or a price searcher.
Microeconomics, 13th Edition
Chapter 10 Monopoly
(KEY QUESTION) Bob is a magazine monopolist. His marginal cost of production (per magazine) is constant
at $5. His demand information is as follows:
Price ($)
QD
50
40
30
10
20
20
15
30
10
50
5
102
2.50
200
a. Calculate the total revenue for Bob at each price.
b. Calculate the (approximate) marginal revenue for Bob at each price.
c. What is Bob's profit-maximising output level and price? Compare this with the perfectly competitive
equilibrium level of output and price.
d. (REAL-WORLD APPLICATION) Go to this useful graphics: www.scores.org/graphics/monopoly, and
offer YOUR OWN views on the following questions: Is Google a monopoly? Should governments
regulate Google? If so, how? (vou can use some other online resources to form vour views)
Main Question: Why will a monopolist refuse to produce at output level when MC = P?
Sub Question 2: What is the opportunity cost on the monopolist if it produces at output level when MR > MC?
Sub Question 3: What then is the condition for optimal production for a monopolist?
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