Question

Use the cost and revenue data to answer the questions.

Quantity	Price	Total revenue	Total cost
1515	9090	13501350	900900
3030	8080	24002400	15001500
4545	7070	31503150	22502250
6060	6060	36003600	31503150
7575	5050	37503750	42004200
9090	4040	36003600	54005400

If the firm is a monopoly, what is marginal revenue when quantity is 3030 ?

MR = $

What is marginal cost when quantity is 6060 ?

MC = $

If this firm is a monopoly, at what quantity will marginal profit be $0.00?

quantity =

If this is a perfectly competitive market, which quantity will be produced?

quantity =

Comparing monopoly to perfect competition, which of the statements are true? Select all that apply.

The monopoly is likely to be less responsive to consumers.

The monopoly's price is higher.

The perfectly competitive market's ouput is lower.

Answer 1

Q	P	TR	TC	MR	MC
15	90	1350	900
30	80	2400	1500	70	40
45	70	3150	2250	50	50
60	60	3600	3150	30	60
75	50	3750	4200	10	70
90	40	3600	5400	-10	80

MR (nth unit) = (TR(Qn) - TR (Qn-1))/(Qn - Qn-1)

MC (nth unit) = (TC(Qn) - TC (Qn-1))/(Qn - Qn-1)

MR (Q = 30) = 70

MC (Q = 60) = 60

Marginal profit = 0 (MR = MC) when Quantity = 45

In a perfectly competitive market Q = 60 (where P = MC)

Correct options:

The monopoly's price is higher.

The monopoly is likely to be less responsive to consumers.