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2. The table below presents information about price, output and costs of a single firm in the aluminum market. Use the information below and fill-in
2. The table below presents information about price, output and costs of a single firm in the aluminum market. Use the information below and fill-in columns for TR, MR, MC, (4 points)
P QD TC TR MR MC
400 0 140 0 0 0
350 1 220 350
300 2 320 600
250 3 440 750
200 4 580 800
150 5 740 750
100 6 940 600
Is the firm operating in the short-run or long-run? Explain how do you know?
- What output level should the monopolist produce to maximize profit? Explain why
- What is the profit maximizing price for this monopolist?
- d. Is the monopolist from above making profit or suffering loss at the output it produces? Explain how do you know, do not calculate the profit or loss.
- f. Calculate the monopolist profit or loss at the profit maximizing/ loss minimizing level of output. Show your work.
- g. Should the monopolist from the above expect entry of new firms in the long-run?
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