Question
In the table below are cost and demand data for a pure monopolist. Quantity demanded Price Marginal revenue Average cost Marginal cost 0 $35.00 1
- In the table below are cost and demand data for a pure monopolist.
Quantity demanded
Price
Marginal revenue
Average cost
Marginal cost
0
$35.00
1
32.00
$32.00
$48.00
$48.00
2
29.00
26.00
30.00
12.00
3
26.00
20.00
23.34
10.00
4
23.00
14.00
21.00
14.00
5
20.00
8.00
20.00
16.00
6
17.00
2.00
19.50
17.00
7
14.00
4.00
19.28
18.00
8
11.00
10.00
18.68
18.50
9
8.00
16.00
18.72
19.00
(a)What is the level of price, output, and amount of profit for an unregulated monopolist?
(b) Using the data in the table, what are the price, output, and profit for a regulated monopolist that sets price equal to marginal cost (socially optimal price) compared with an unregulated monopolist?
(c)Using the data in the table, what are the price, output, and profit for a regulated monopolist that charges a "fair-return" price compared with an unregulated monopolist?
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Smith and Roberson Business Law
Authors: Richard A. Mann, Barry S. Roberts
15th Edition
1285141903, 1285141903, 9781285141909, 978-0538473637
