(a) Complete the following table: Instructions: Enter your responses rounded to

Question

(a) Complete the following table:

Instructions: Enter your responses rounded to the nearest whole number. Indicate a negative response with a (-) negative sign.

(b) At what rate of output does marginal revenue turn negative?



(c) If marginal cost is constant at $12, what is the profit-maximizing rate of output?



(d) Assuming a firm has monopoly power, what price should be charged at that rate of output?

$

Price $24 $21 $18 $15 $12 $9 $6 $3 Quantity Demanded 1 2 3 4 5 6 7 8 Marginal Revenue $ $ $ $ $ $ $ $

Explanation / Answer

Total Revenue

MR= TR/Addition of Q

profit maximum earned is

Tr-TC=

Hence the price shoul be kept at $18

Price $24 $21 $18 $15 $12 $9 $6 $3 Quantity Demanded 1 2 3 4 5 6 7 8

Total Revenue

$24 $42 $54 $60 $60 $54 $42 $24

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