Need some help with this practice problem... Thanks Below is the demand curve fa

Question

Need some help with this practice problem... Thanks

Below is the demand curve faced by a pure monopolist. Move the interactive point to identify where marginal revenue (MR) = marginal cost (MC) for this monopolist and answer the questions below. What is the monopolist's profit maximizing price? Output? Are positive long run profits possible under this market structure? Positive long run economic profits are definite. Long run economic profits will be zero. Positive long run economic profits are possible if barrriers to entry remain high.

Explanation / Answer

1)   condition   for profit maximization

MR=MC

thus   P= $6

Q =400

2) Positive long run profits are high if barrier to entry remain high

    In the absence of entry barriers other firms shall be lured to enter the market and usurp the profits

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