Question
The following shows the price and quantity schedule for a monopolist Price 9 8 7 6...
- The following shows the price and quantity schedule for a monopolist
Price 9 8 7 6 5 4 3 2 1 0
Quantity 0 1 2 3 4 5 6 7 8 9
Marginal cost equals 5. Calculate the marginal revenue associated with each quantity level;
What level of output should the monopolist choose? Explain
Homework Answers
Answer #1
Marginal revenue is the additional revenue that firm earns from one additional unit of output. Thus Marginal Revenue is given by
In order to maximize profit a monopolist chooses that quantity at which MR = MC and if there is no such quantity at which MR = MC and if there is no quantity at which MR = MC, then it produces till MR > MC where MR = Marginal Revenue and MC = Marginal Cost.
We can see from above that there is no quantity at which MR = MC and last quantity at which MR > MC(=5) is Quantity = 2.
Hence, Monopolist should choose 2 units of output.
Not the answer you're looking for?
Similar Questions
price quantity marginal revenue $8 0 $7 1 $6 2 $5 3 $4 4 $3 5...
price
quantity
marginal revenue
$8
0
$7
1
$6
2
$5
3
$4
4
$3
5
$2
6
$1
7
a monopolist firm sees the following demand, find the marginal
revenue.
Here's the same firm cost schedule find the marginal cost and
based off of the data in these 2 find the monopolist equilibrium
quantity and price.
quantity
total variable cost
marginal cost
1
$5
2
$9
3
$12
4
$14
5
$18
6
$24
7
$32
8
$42
A monopolist faces the following demand curve: Price Quantity $10 5 $9 10 $8 16 $7...
A monopolist faces the following demand curve:
Price
Quantity
$10
5
$9
10
$8
16
$7
23
$6
31
$5
45
$4
52
$3
60
The monopolist has total fixed costs of $40 and a constant marginal
cost of $5. What is the profit-maximizing level of output?
Select one:
?a. 31 units
?b. 7 units
?c. 16 units
?d. 23 units
Table 17-9 The table shows the demand schedule for a particular product. Quantity Price 0 16...
Table 17-9 The table shows the demand
schedule for a particular product.
Quantity
Price
0
16
1
14
2
12
3
10
4
8
5
6
6
4
7
2
8
0
Refer to Table 17-9. Suppose the market for
this product is served by two firms that have formed a cartel. If
the marginal cost of production is $4 and the fixed cost is $6, the
combined profit of the cartel will be
A. $24
B. $6
C. $12...
Table 15-19 A monopolist faces the following demand curve: Quantity Price 0 $20 1 $18 2...
Table 15-19
A monopolist faces the following demand curve:
Quantity
Price
0
$20
1
$18
2
$16
3
$14
4
$12
5
$10
6
$8
7
$6
8
$4
9
$2
10
$0
Refer to Table 15-19. If a monopolist faces a
constant marginal cost of $9, how much output should the firm
produce?
a.
2 units
b.
3 units
c.
4 units
d.
5 units
Use the demand schedule below to calculate total revenue and marginal revenue at each quantity. Explain...
Use the demand schedule below to calculate total revenue and
marginal revenue at each quantity. Explain why the marginal revenue
of the fourth unit of output is $3.50, even though its price is
$5.
Price (P)
Quantity Demanded (Q)
Price (P)
Quantity Demanded (Q)
$7.00
0
$4.50
5
6.50
1
4.00
6
6.00
2
3.50
7
5.50
3
3.00
8
5.00
4
2.50
9
In the following table are demand and cost data for a pure monopolist. Complete the table...
In the following table are demand
and cost data for a pure monopolist.
Complete the table by filling in the
columns for total revenue, marginal revenue, and marginal cost.
Answer these three questions: (a)
what output will the monopolist produce? (b) What price will the
monopolist charge? (c) What total profit will the monopolist
receive at the profit-maximizing level of output?
Total
Marginal
Total
Marginal
Quantity
Price
revenue
revenue
cost
cost
0
$34
$______
$ 20
...
Suppose the following table gives the demand schedule for a monopolist. The monopolist has no fixed...
Suppose the following table gives the demand schedule for a
monopolist. The monopolist has no fixed costs and faces a constant
marginal cost of $15 per unit produced.
Price
Quantity
$51
1
$47
2
$42
3
$36
4
$29
5
$21
6
$15
7
a) What is the profit maximizing quantity for this monopolist?
What price will it charge? What will be the firm’s profits?
b) Is the monopolist level of production efficient from
society’s perspective? Explain why or why...
Complete the following cost and revenue schedule: Price Quantity Demanded Total Revenue Marginal Revenue Total Cost...
Complete the following cost and revenue schedule:
Price
Quantity Demanded
Total Revenue
Marginal Revenue
Total Cost
Marginal Cost
Average Total Cost
20
0
8
18
1
14
16
2
22
14
3
32
12
4
44
10
5
58
8
6
74
6
7
92
4
8
112
2
9
147
a. Graph the demand, MR, and MC curves.
b. At what rate of output are profits maximized within this
range?
c. What are the values of MR and MC...
1) A monopolist is able to choose whatever price that it wishes and is only constrained...
1) A monopolist is able to choose whatever price that it wishes
and is only constrained by its greed.
True
False
------------------------------------
2) Table 15-21
Tommy’s Tie Company, a monopolist, has the following cost and
revenue information. Assume that Tommy’s is able to engage in
perfect price discrimination.
COSTS
REVENUES
Quantity
Produced
Total Cost
Marginal
Cost
Quantity
Demanded
Price
Total
Revenue
Marginal
Revenue
0
$100
--
0
$170
--
1
$140
1
$160
2
$184
2
$150
3
$230
3...
1) Suppose that a single price monopolist faces a linear, downward sloping demand curve and a...
1) Suppose that a single price monopolist faces a linear,
downward sloping demand curve and a total cost curve that includes
the following data points:
Price
Quantity
Total Revenue
8
0
7
1
6
2
5
3
4
4
3
5
2
6
1
7
0
8
Quantity
Total Cost
0
2
1
4
2
6
3
8
4
10
5
12
6
14
7
16
8
18
a. What is the profit maximizing condition for a monopolist? In
order...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 4 minutes ago
asked 26 minutes ago
asked 33 minutes ago
asked 38 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago