a See page 313 Question (8 points) If you\'re like most college students, you ar

Question

a See page 313 Question (8 points) If you're like most college students, you are always worried about having enough money. Suppose that you decide to become an Uber driver and offer rides to students on weekends. For a fee, you will drive them to parties and pick them up at the end of the night. The table below depicts the demand schedule for rides. To keep things simple, assume that you are the only person providing this service; that is, you're a monopolist Let's see how much money you can make. antity of Rides Demanded 70 10 1st attempt 01 MacBook Air 0 FS

Explanation / Answer

Ans:

1) Table showing marginal revenue and marginal cost.

2) price charged per ride to maximize its profits is $40.

Monopolist will maximize its profits by producing the level of output where marginal revenue is equal with its marginal cost.In ths case price charged per ride to maximize its profits is $40.

3) Profit = Total revenue - Total cost

= ($40 * 30) - ($15 * 30)

= $1200 - $450

= $750

Price Quantity of rides demanded Total revenue Marginal Revenue Marginal cost $70 0 $0 $0 0 $60 10 $600 $600 $150 $50 20 $1000 $400 $150 $40 30 $1200 $200 $150 $30 40 $1200 $0 $150 $20 50 $1000 -$200 $150 $10 60 $600 -$400 $150

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