Question
Assume a monopolistic firm with a constant marginal cost (MC). The firm's demand schedule is given by table 1 below. Calculate the firm's total revenue.
Assume a monopolistic firm with a constant marginal cost (MC). The firm's demand
schedule is given by table 1 below. Calculate the firm's total revenue. Average revenue and
marginal cost.
Output Price (Rands) Total Revenue Marginal Revenue
3 300
5 250
8 220
9 200
13 180
15 160
19 140
24 100
30 60
1.1 Find the firm's total revenue schedule, entering the data into the table where
indicated. (10)
1.2 Use these data to determine the marginal revenue schedule (Show calculations) (10)
1.3 Assuming a constant marginal of R40, what output level and price will maximize the firm's
profit?
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