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Can someone please explain how to compute these? 1. Assume that the short-run cost and demand data given in the tables below confront a monopolistic

Can someone please explain how to compute these?

1. Assume that the short-run cost and demand data given in the tables below confront a monopolistic competitor selling a given product and engaged in a given amount of product promotion.

Cost Data Demand Data
Total Output Total Cost Quantity Demanded Price
0 $ 25 0 $ 50
1 40 1 48
2 45 2 46
3 55 3 44
4 70 4 42
5 90 5 40
6 115 6 38

If the firm sells 2 units of output, marginal revenue will be

Multiple Choice

  • $28.
  • $44.
  • $4.
  • $92.

2. Answer the question based on the demand and cost schedules for a monopolistically competitive firm given in the table below.

Price Quantity Demanded Total Cost Output
$ 24 1 $ 10 1
20 2 20 2
16 3 29 3
12 4 36 4
8 5 40 5
4 6 42 6

What output quantity will the monopolistically competitive firm produce to maximize profits?

Multiple Choice

  • 3
  • 4
  • 2
  • 5

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