Economics

Question Four: Monopoly Minnie's Mineral Springs is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule for Minnie's water and coiumns 2 and 3 set out Minnie's total cost schedule. Price Quantity demanded Total cost Marginal revenue Marginal cost ES per bottle) (boltles per hour) (S ,-' hour) ('3 :' additional bollle) (S 1' additional bollie) In 0 ] B | 3 6 2 T 4 3 l 3 2 4 2| 0 S 3 l (a) Fill in the blanks above and draw the market demand curve, Minnie's MR and MC curves together on the same diagram below. {_ /3%, 5%} (b) Minnie's prot maximizing output level is and the prot maximizing price is . The profit equals . ( / 9%) [c] If marginal cost pricing is adopted. the market price would be and the output level at . Comparing single-price monopoly and marginal cost pricing. (single-price monopoly I marginal cost pricing) is inefficient with deadweight loss as illustrated by the shaded area in your diagram in (a). (' /3%. 3%, 2%, 3%)