Exhibit 9-3 130 ATC AVC 10 IR 0 501ool 150 200 for the firm in Exhibit 9-3, the
ID: 1110767 • Letter: E
Question
Exhibit 9-3 130 ATC AVC 10 IR 0 501ool 150 200 for the firm in Exhibit 9-3, the single price monopolist wi charge per unit of output. a. $30 b. $24 c. $22 d. $20 e. $10 The total revenue for the firm in Exhibit 9-3, a monopolist that maximizes profit while charging all customers the same price, is a. $2,574 b. $2,808 c. $2,100 d. $1,638 e. $3,300 7. 8. The total cost for the firm in Exhibit 9-3, a monopolist that maximizes profit while charging all customers the same price, is a. $3,300 b. $3,400 c. $2,808 d. $2,340 e. $1,638Explanation / Answer
6.
A monopolist profit-maximising condition ;
MR=MC,
Therefore the profit-maximising quantity will be 117 units where MR=MC.
The price will be determined by vertical intersect of this quantity on the demand curve. As it can be seen in the diagram, the price will be $24.
Hence Monopolist will charge to all consumer the same price and it will be $24 per unit of output.
Hence option b will be the correct answer.
(7)
The monopolist total revenue = P* Q
=24* 117
=$2,808
The total revenue of the monopolist will be by charging a profit-maximising price and selling profit-maximising quantity are $2,808.
Hence option b will be the correct answer.
(8)
Since at profit-maximising level of quantity ATC of the firm is $20.
Hence Total cost = ATC*Q
=$20*117
=$2,340
Since at profit-maximising level of output, the total cost is $2,340.
Hence option d will be the correct answer.
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