Question
Common Grounds is the only seller of cappuccinos in town(i.e. Common Grounds is a Monopoly in this town).The table shows the market demand for cappuccinos.
Common Grounds is the only seller of cappuccinos in town(i.e. Common Grounds is a Monopoly in this town).The table shows the market demand for cappuccinos. 1-1.(4points)Fill in the blanks in TR and MR columns. (Note: show formulae in at least one row).
Q | P | TR | MR |
0 | $4.50 | 0 | - |
1 | 4 | 4 | 4 |
2 | 3.5 | 7 | 3 |
3 | 3 | 9 | 2 |
4 | 2.5 | 10 | 1 |
5 | 2 | 10 | 0 |
6 | 1.5 | 9 | -1 |
2.(4points)Draw a graph with the price line (i.e. the Demand Curve) and the MR curve. 3.(4points) Add a marginal cost(MC) curve onto the graph. (Hint: just need to randomly add a MC curve without knowing more data of MC, but need to keep the u-shape.) 4.(5points)Denote the profit maximization quantity Q*, and corresponding price P* the shop should set. 5.(5points)Add an average total cost(ATC) curve onto the graph, show the firm is experiencing positive profit, by shading the area of the positive profit.
*** Stuck on 3, 4, 5 (already answered 1,2). Just answers please Thanks.
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