A. Suppose that Ed has acquired a monopoly on the production of baseballs and faces the demand and cost situation shown in the following table

Price Quantity (per week) Total Revenue Marginal Revenue Total Cost Marginal Cost

$20 15,000 $330,000

19 20,000 365,000

18 25,000 405,000

17 30,000 450,000

16 35,000 500,000

15 40,000 555,000

a.Fill the remaining values in the tables

b.If Ed wants to maximize profits, what price should he changes and how many baseballs should he sell? Draw a graph to illustrate your answer.

c.Suppose the government imposes a tax of $50,000 per week on baseball production. How what price should Ed charge, and how many baseballs should he sell?

B. Suppose you decide to open a copy store. You rent a store (sign a one year lease to do so), and you take out a loan at a local bank and use the money to purchase 10 copiers. Six months later, a large chain opens a copy store two blocks away from yours. As a result, the revenue you receive from your copy store, while sufficient to cover the wage of your employees and the costs of paper and utilities, doesn't cover all your fixed costs (rent and the interest and repayment costs on the loan you took to purchase the copiers). Should you continue operating your business?