The following table shows the demand for a product produced by a monopolist, who has a constant marginal cost and an average total cost of 45 per unit. Quantity Price per unit 0 120 1 105 2 90 3 75 4 60 5 45 6 30 Calculate the total revenue and marginal revenue for the level of quantity. What are the profit-maximizing output level and price level of the product? In no more than three sentences, explain why. Calculate the monopolist’s profit. Calculate the Lerner Index for this industry.
The following table shows the demand for a product produced by a monopolist, who has a constant marginal cost and an average total cost of 45 per unit. Quantity Price per unit 0 120 1 105 2 90 3 75 4 60 5 45 6 30 Calculate the total revenue and marginal revenue for the level of quantity. What are the profit-maximizing output level and price level of the product? In no more than three sentences, explain why. Calculate the monopolist’s profit. Calculate the Lerner Index for this industry.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter24: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 15CQ
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The following table shows the demand for a product produced by a monopolist, who has a constant marginal cost and an
Quantity |
Price per unit |
0 |
120 |
1 |
105 |
2 |
90 |
3 |
75 |
4 |
60 |
5 |
45 |
6 |
30 |
- Calculate the total revenue and marginal revenue for the level of quantity.
- What are the profit-maximizing output level and price level of the product? In no more than three sentences, explain why.
- Calculate the monopolist’s profit.
- Calculate the Lerner Index for this industry.
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