Question

A​ monopolist's maximized rate of economic profits is ​$200 per week. Its weekly output is 200 ​units, and at this output​ rate, the​ firm's marginal cost is $39 per unit. The price at which it sells each unit is ​$51 per unit.

At these profit and output​ rates, the​ firm's average total cost is $___(Enter your response as a whole​ number.)

At these profit and output​ rates, the​ firm's marginal revenue is $___(Enter your response as a whole​ number.)

Answer 1

Economic Profit = Total Revenue - Total Cost

Given : economic Profit = 200

Total Revenue = Price* Quantity = 51*200 = $10,200

=> 200 = 10,200 - Total Cost

=> Total Cost = $10,000

Average Total Cost = Total Cost/Quantity = 10,000/200 = $50

Hence, Firm's Average Total Cost = $50

(ii)

In order to maximize profit a monopolist produces that quantity at which Marginal revenue = Marginal Cost.

Here Marginal Cost = $39

Hence Marginal revenue = Marginal Cost = $39

Hence, At these profit and output​ rates, the​ firm's marginal revenue is $39

Hence Marginal revenue = $39