Question

4. The following are the demand and total cost schedules for the Normal Telephone Company, a...

4. The following are the demand and total cost schedules for the Normal Telephone Company, a local monopoly.

Output

(# of calls)

Price

(dollars per call)

Total Cost

(dollars)

0

.12

0

50,000

.11

2,000

100,000

.10

6,500

150,000

.09

11,000

200,000

.08

16,000

250,000

.07

23,000

300,000

.05

32,000

How much output will Normal Telephone company "produce," and what price will it charge?

Will it earn a profit? How much? (Hint: You first have to compute its MR and MC schedules. If you have two answers, choose the one with the lowest price.)

Homework Answers

Answer #1

Output

Price

Total Cost

(# of calls)

(dollars per call)

(dollars)

TR

MR

MC

Profit

0

0.12

0

0

50,000

0.11

2,000

5500

0.11

0.04

3,500

1,00,000

0.1

6,500

10000

0.09

0.09

3,500

1,50,000

0.09

11,000

13500

0.07

0.09

2,500

2,00,000

0.08

16,000

16000

0.05

0.1

0

2,50,000

0.07

23,000

17500

0.03

0.14

-5,500

3,00,000

0.05

32,000

15000

-0.05

0.18

-17,000

From the above table, it would produce an output where MC=MR

It would produce an output of 1,00,000 # calls

It will charge the price of 0.1 dollars per call

Yes it would earn a profit of $3500

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The following equations describe the monopolist’s demand, marginal revenue, total cost and marginal cost: Demand: Qd...
The following equations describe the monopolist’s demand, marginal revenue, total cost and marginal cost: Demand: Qd = 12 – 0.25P | Marginal Revenue: MR = 48 – 8Q | Total Cost: TC = 2Q^2 | Marginal Cost: MC = 4Q Where Q is quantity and P is the price measured in dollars. a) What is the profit maximizing monopoly’s quantity and price? b) At that point, calculate the price elasticity of demand. What does the value imply? c) Does this...
Q-1: Sunrise Juice Company sells its output in a perfectly competitive market. The firm's total cost...
Q-1: Sunrise Juice Company sells its output in a perfectly competitive market. The firm's total cost function is given in the following schedule: Output Total Cost Marginal Cost Average Total (Units) ($) ($/unit) Cost ($/unit) 0 50 -- -- 10 120 7=(120-50)/(10-0) 12=(120-10) 20 170 ? ? 30 210 ? ? 40 260 ? ? 50 330 ? ? 60 430 ? ? Total costs include a "normal" return on the time (labor services) and capital that the owner has...
A firm faces the following demand and total cost schedules: Demand Total Cost P ($) Q...
A firm faces the following demand and total cost schedules: Demand Total Cost P ($) Q Q TC ($) 20 1 1 2 18 2 2 6 16 3 3 11 14 4 4 18 12 5 5 26 Suppose that the firm is required to produce a whole number of items each month. Ho much does it produce and what is price. How do you know?.
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...
VoIP Telephone, Inc., provides local and long distance telephone service in the Toledo, Ohio market. The...
VoIP Telephone, Inc., provides local and long distance telephone service in the Toledo, Ohio market. The company faces the following segmented demand and marginal revenue curves for its service: Over the range of 0 to 25(000) customers per month: P1 = 6 - 0.04Q MR1 = ?TR1/?Q = 6 - 0.08Q When output exceeds 25(000) customers per month: P2 = 8 - 0.12Q MR2 = ?TR2/?Q = 8 - 0.24Q The company's total cost is as follows: TC = 2.50...
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost...
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost curve for its product: Q = 200 - 2P MR = 100 - Q    TC = 5Q MC = 5    a. What is the profit maximizing level of output? b. What is the profit maximizing price? c. How much profit does the monopolist earn?
2. The market for air conditioners has: Total Cost: TC = 20 + 10Q +(3/4)Q2 Marginal...
2. The market for air conditioners has: Total Cost: TC = 20 + 10Q +(3/4)Q2 Marginal Cost: MC = 10 + (3/2)Q Marginal Revenue: MR = 1,010 – 0.5Q Demand: Q = 4,040 – 4P 2a. If a monopoly controls the market, calculate the equilibrium price and quantity of air conditioners. 2b. Calculate the monopoly profits from part a. 2c. If the government imposed a tax of $80 per air conditioner that the monopoly sells, calculate the equilibrium new price...
Barbara is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal revenue...
Barbara is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal revenue curve, and total cost curve are given as follows Q = 160 – 4P TR – 40Q – 0.25Q² MR = 40 – 0.5Q TC = 4Q MC = 4 Answer the following three questions: (You don't need to show your work, just type your answer as a number) a) What is the optimum output for Barbara? b) What is the market price? c)...
Complete the following cost and revenue schedule                                   &
Complete the following cost and revenue schedule                                                                                                                                     Average    Quantity           Total Marginal            Total                Marginal            Total Price       Demanded       Revenue        Revenue             Cost                Cost                  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...
Suppose you are given the following table: Output Price Total Cost Total Revenue Marginal Revenue Marginal...
Suppose you are given the following table: Output Price Total Cost Total Revenue Marginal Revenue Marginal Cost Average Total Cost Profit/ Loss (P-ATC) 0 150 100 1 138 150 2 125 184 3 113 208 4 100 227 5 88 250 6 75 280 7 63 318 8 50 366 9 38 425 10 25 500 a. Determine the optimum /profit maximizing point using the MR-MC Principle b. At this point, what are the total profits? c. Calculate (Price -...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Identifying Activity Bases in an Activity-Based Cost System Comfort Foods Inc. uses activity-based costing to determine...
    asked 14 minutes ago
  • Solve y'' + 2y' + 4y = 1 subject to y(0) = y'(0) = 0 (differential...
    asked 48 minutes ago
  • A school psychologist wants to know if a popular new hypnosis technique impacts depression. The psychologist...
    asked 57 minutes ago
  • Two identical sedimentation tanks are to be designed for an activated sludge plant with a flow...
    asked 1 hour ago
  • Hello, could you provide an original example of a security flaw or vulnerability related to strings....
    asked 1 hour ago
  • Let f(x)=5−log(x+1), g(x)=x2−2x−4 and k(x)=5/(x−4). (a) Find (fog)(x)(fog)(x) and its domain using the interval notation. (b)...
    asked 1 hour ago
  • List the main load transfer mechanisms in pile foundation and comment about the optimal spacing of...
    asked 1 hour ago
  • An athlete swings a 6.50-kg ball horizontally on the end of a rope. The ball moves...
    asked 2 hours ago
  • 1. Observation research must be systematic, not casual or haphazard, in its design. True or False...
    asked 2 hours ago
  • "Thinking as skill". Dr. Edward de Bono gave Lateral Thinking its name and developed techniques for...
    asked 2 hours ago
  • Part 1 a) Earned Value Management (EVM) is a project management technique for measuring project performance...
    asked 2 hours ago
  • 11.3.2 Levi-Strauss Co manufactures clothing. The quality control department measures weekly values of different suppliers for...
    asked 2 hours ago