Which form IS an This monopoly can maximize its profits by selling Q at P = S___

Question

Which form IS an This monopoly can maximize its profits by selling Q at P = S_____At the price you answered the question(2), this firm will earn profits = S_____The maximum technical efficiency output level for this monopoly is: Q =_______The OTHER firm below, (the one this is NOT a monopoly), can maximize its profits by selling Q =______at P= S______This firm in question (5) can earn profits = S______if they sell the quantity and charge the price you answered for question (5). The maximum technical efficiency output level for the firm in question (5) and (6) is equal to: Q =_____Which of these two firms is likely to be a small, neighborhood retail store?_____Which of these two firms is likely to be charging Price = Average Cost in the long ?_____

Explanation / Answer

a) A firm is monopoly when it is the only selller in market. In the figure, Firm A has market demand that is the whole demand of market will be fulfilled by this one firm only. Hence Firm A is monopoly.

b) Profit can be maximized by selling 200 units at $22 per unit. as at this Q MR mes MC and at this price tyhis intyersection is dragged to meet at demand curve.

c) Profit = tr - tc = P*Q - AC*Q = 22*200 - 12*200 = 4400 - 2400 = $2000

e) the other firm will sell 300 units at $18 price.

f) Profit = 18*300 - 10*300 = 5400 - 3000 = $2400

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