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Reading a Monopoly's Graph YogonoM 6 arilbeef Use the graph below to answer questions 1-9. Show any work. MC $200 $150 8 ATC AVC $110 h $100 MR D = AR 100 1. Is this firm's production following the profit maximizing rule? How do you know? 2. At 100 units of output, what price will this monopoly charge? 3. What is the dollar value of total revenue? 4. What is the dollar value of total cost? 5. What is the firm's profit? 6. Is this firm earning a positive profit, a loss, or breaking even? How can you use AR and ATC at the 100 units of output to make this determination? 7. Use the lettering on the graph to state the area of profit for this firm. 8. If the firm decided to decrease production, how would total profit be impacted? (Use the concepts of MR and MC to explain.) 9. If the firm decided to increase production, how would total profit be impacted? (Use the concepts of MR and MC to explain.) Use the graph below to answer questions 10-13.Reading a Monopoly's Graph ATC $500 MC $470 AVC $350 $270 MR D=AR 75 10. At 75 units, what kind of profit (positive profit, loss, or zero) is this firm earning? Is it possible for this firm to improve its profit level by adjusting production? Why or Why not? 11. What is the dollar value of total revenue at 75 units? 12. What is the dollar value of total cost at 75 units? 13. Consider the price being charged by the firm. Given this price and the firm's current profit level, would this firm be better off to shut down operations? Why or why not? (Link back to TFC and TVC) 14. Draw the graph for a monopoly earning a positive economic profit. Suppose the government institutes a per unit tax on the good produced by the monopoly (consider the impact it will have on the cost curves). On the graph, show how this will affect the monopoly's profit maximizing level of output and the price charged by the monopoly