1. Locate the chart in Chapter 9, Study Problems question 2. Change the price to $5. Provide the chart in your answer to the following. .

a. Calculate the total revenue for the business at each rate of output.

b. Calculate the total profit for the business at each rate of output.

c. Is the business operating in the short run or the long run? Please explain.

d. What is the MR=MC rule? Calculate the profit maximizing rate of output using the MR=MC rule.

2. Locate the graph in Chapter 10, study problems question 1. Use the graph to answer the following questions.

a. Draw the graph as shown in the book.

b. Identify the price that the monopolist will charge and the output the monopolist will produce? Explain how you identify the two points.

c. On the graph, identify the consumer surplus for the monopolist.

Principles of Economics Connected to Willolabs el Chapter 9: Firms in 3 Competitive Market > How Do Firms Maximize Profits? S =m0 When to Operate and When to Shut Down If the MR (marginal revenue) curve is above the minimum point on the ATC (average total cost) curve, the Ice Cream Float will make a profit (shown in green). If the MR curve is below the minimum peoint on the ATC curve ($2.50) but above the minimum point on the AVC (average variable cost) curve ($2.00), the float will operate at a loss (shown in yellow). If the MR curve is below the minimum point on the AVC curve ($2.00), the float will temporarily shut down (shown in red). Price and cost ATC The firm earns a profit if the MR curve is here. ATC = $2.50 The firm will operate at a loss if the MR curve is here. AVC = $2.00 The firm will shut down if the MR curve is here, Quantity (ice cream sold) Principles of Economics Chapter 10: Understanding Monopely How Much Do Monopolies Charge, and How Much Do They Produce? Connected to Willolabs Comparing the Demand Curves of Perfectly Competitive Firms and Monopolists (a) Firms in a competitive market face a horizontal demand curve. (b) Because the monopolist is the sole provider of the good or service, the demand for its product constitutes the industryor marketdemand curve, which is downward sloping. So while the perfectly competitive firm has no control over the price it charges, the monopolist gets to search for the profit-maximizing price and output. Price Firm's quantity (a) Competitive Firm Price D Market quantity (b) Monopolist as Sole Provider