A.3 Consider the case of monopoly who faces a downward sloping demand curve and is to charge a single price for all its consumers. The firm is to maximize its profit. The cost structure is presented on the left- hand side of the table below, while the demand curve is on the right-hand side of the table. Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7 Production and Costs Demand, TR and MR Total ATO MC Price Quantity TR MR Product Demanded N.A. N.A. $100 0 SO N.A. $105.00 $45 $95 S S N P $72.50 $40 $90 2 $ 3 $60.00 $35 $85 w 4 $52.50 $30 $80 $320 $65 5 $49.00 $35 $75 $375 $55 6 $47.50 $40 $70 $420 $45 $47.14 $45 $65 $455 $35 00 $48.13 $55 $60 8 $480 $25 $50.00 $65 $55 $495 $15 (1) Fill in the missing values in Column 6 and Column 7. (2) Identify the firm's profit-maximizing output quantity. Answer: units (Hint: Compare MC with MR for each quantity, while making sure that you have passed the point where the LDR has set in.) (3) Given (2), identify the price that the firm should charge. Answer: $ (Hint: The demand curve is the price line.) (4) Given (2), identify the firm's total cost per unit of output. Answer: $ (Hint: ATC is the total cost per unit of output.) (5) What is the firm's profit per unit of output? Answer: $ (6) What is the firm's total profit? Answer: $ (7) What is the total consumer surplus? Answer: $. (Hint: Add up all consumer surpluses, from Unit #1 up to the last unit served.)