Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

help answer problem 3. Suppose that a monopolist firm produces luxury fountain pens. The chart below shows the quanties of fountain pens that can be

help answer problem

image text in transcribed
3. Suppose that a monopolist firm produces luxury fountain pens. The chart below shows the quanties of fountain pens that can be sold at various prices and the firm's cost structure. 36 points Marginal Cost Average Cost Quantity Price of Total Total Marginal of fountain Cost Revenue Revenue fountain pens pens (.40 01 O 01-h: OO 00 a] What is the amount of fixed costs for this firm? 4 points b) Fill in the table above. 20 points c) Based on the table above, what this the profit maximizing quantity of luxury fountain pens that this firm should sell? How do you know? 4 points d) What price should the monopolist charge at the profit-maximizing quantity? How do you know? 4 points e) How much profit will the monopolist make at that quantity? Show your calculation. 4 points

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Econometrics By Example

Authors: Damodar Gujarati

2nd Edition

1137375019, 9781137375018

More Books

Students also viewed these Economics questions

Question

How easy the information is to remember

Answered: 1 week ago

Question

The personal characteristics of the sender

Answered: 1 week ago