Question
5) The table below depicts market demand and cost curves for a monopolist. Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost 100 $12
5) The table below depicts market demand and cost curves for a monopolist.
| Quantity | Price | Total Revenue | Marginal Revenue | Total Cost | Marginal Cost |
| 100 | $12 | $1200 | $1600 | ||
| 200 | 11 | 2200 | $1000/100 = $10 | 2200 | $6 |
| 300 | 10 | 3000 | 800/100 = 8 | 2800 | 6 |
| 400 | 9 | 3600 | 600/100 = 6 | 3400 | 6 |
| 500 | 8 | 4000 | 400/100 = 4 | 4000 | 6 |
| 600 | 7 | 4200 | 200/100 = 2 | 4600 | 6 |
a) Assume that the firm must produce in 100-unit increments as shown in the table. Which quantity is profit-maximizing for the firm?
b) At the profit-maximizing quantity, what price will the firm charge?
c) What will be the amount of the firm's profit or loss at the profit-maximizing level?
6) For each of the four industry types listed below, indicate whether or not they can continuously earn above-normal profits in the long run.
| Industry Type | Above-normal profit in the long run? (Yes or No) |
| Pure Competition | |
| Pure Monopoly | |
| Monopolistic Competition | |
| Oligopoly |
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Advanced Accounting
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
14th Edition
1260247821, 978-1260247824
