Price, marginal revenue, marginal cost, average total cost MC ATC Ps P2 Demand M

Question

Price, marginal revenue, marginal cost, average total cost MC ATC Ps P2 Demand MR Quantity per period a. The profit maximizing quantity is determined by the intersection of and curves and this happens at Point b. The profit-maximizing price is_and will generate total economic profit equal to the area of 3. (10 points) Consider a natural monopolist (unregulated) that would like to produce where MR-MC. It faces a downward no matter how many units it makes, it is constant. sloping demand curve of P-100-2Q and marginal revenue curve of 100-4Q. Its marginal cost is $20 a. Solve for the profit-maximizing quantity for this natural monopolist by setting MR-MC and solving for O. Q= b. Suppose fixed costs are $100. What is the total cost for this monopolist?

Explanation / Answer

Q2
Answer
a)
marginal revenue, marginal cost, G
the firm maximizes profit at MR=MC

b)
P3, P3P2FE
the profit maximizing price is found by demand curve above the point G, where ATC=P2
profit=(P-ATC)*Q

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.