5.The following are the demand and total cost schedules for Company Town Water, a local monopoly(2 points)

Output in Gallons Price per Gallon Total Cost

50,000 $0.28 $6,000

100,000 0.26 15,000

150,000 0.22 22,000

200,000 0.20 32,000

250,000 0.16 46,000

300,000 0.12 64,000

How much output will Company Town Water produce, and what price will it charge? Will it earn a profit? How much?(Hint: First compute the firms MR and MC schedules)

Calculation Procedure:

6. The above Question 5 presented cost and demand data for a monopolist and asked you to find the profit-maximizing solution. Use these same data to find the sales-maximizing solution. In terms of the firms MR, explain why the answers are different.(2 points)

Calculation Procedure: