1.This question examines the pure monopoly market for silly sprockets. You will use a market demand curve to identify the maximum willingness to pay by consumers for different quantities of silly sprockets, the total revenue associated with selling a particular quantity, and the marginal revenue earned from each unit. Additionally, you will use the marginal cost of producing a silly sprocket to determine how many silly sprockets a monopolist should produce and sell.

Silly Sprockets are produced and sold by a single firm, Sally's Silly Sprockets. The monopolist faces a market demand characterized by the function:

P = 4 - Q

where Q is the number of silly sprockets that the monopolist produces and sells, and P represents consumers' maximum willingness to pay for a particular quantity. The table below will help you identify and organize different relationships between quantity, price, total revenue, and marginal revenue.

Quantity

(widgets)

Price

(dollars)

Total Revenue

(dollars)

Marginal Revenue

(dollars)

0

-----

1

$3.50

2

3

$7.50

4

$2.00

5

-$0.50

6