Monopoly 10 points:

The chart below depicts the current monopoly market for cadmium. The price is per pound (lb) and the quantities are in millions of lbs.

Price	Market demand	Total revenue	Marginal revenue	Total cost	Average total cost	Marginal Cost
$90	0	0	-	8000	-	-
$80	100	8000	80	11000	110	30
$70	200	14000	60	13000	65	20
$60	300	18000	40	14000	46.67	10
$50	400	20000	20	16000	40	20
$40	500	20000	0	21000	42	50
$30	600	18000	-20	27000	45	60
$20	700	14000	-40	35000	50	80
$10	800	8000	-60	45000	56.25	100

1. Draw the market demand curve, marginal revenue and marginal cost curves.
2. What is the equilibrium price of cadmium in the market?
3. How much cadmium will be produced at equilibrium in this market?
4. What is the profit earned by this monopolist?
5. What is the profit per unit earned by the monopolist?

QUESTION 11

1. Now look at the MONOPOLY TABLE and your answers to the MONOPOLY questions.

The profit maximizing output for this monopolist is ________ units (numeric).

1.5 points

QUESTION 12

1. Continue looking at the MONOPOLY table and answers.

The profit maximizing price this monopolist will charge is $ _______(Numeric).

1.5 points

QUESTION 13

1. Continue looking at the MONOPOLY table and answers.

Thetotal revenue (TR) this monopolist willreceive when it maximizes its profit is $ _______(Numeric).

1.5 points

QUESTION 14

1. Continue looking at the MONOPOLY table and answers.

Theaverage total cost (ATC) this monopolist will experience when it maximizes its profit is $ _______(Numeric).

1.5 points

QUESTION 15

1. Continue looking at the MONOPOLY table and answers.

The total cost (TC) this monopolist will experience when it maximizes its profitis $ _______(Numeric).

1.5 points

QUESTION 16

1. Continue looking at the MONOPOLY table and answers.

This monopolist earns $________profit (numeric) when it maximizes its profit.

1.5 points

QUESTION 17

1. Continue looking at the MONOPOLY table and answers.

This monopolist earns $________profit per unit(numeric) when it maximizes its profit.

1.5 points

QUESTION 18

1. What time period of production is this monopolist operating in?

		Short run
		market period
		long run
		short or long run

1.5 points

QUESTION 19

1. Which of the following best describes what the monopolist should do in this situation?

		Raise its price.
		Lower its price.
		It should maintain its current price.
		It should exit the industry.
		Shut down if P < ATC, and continue to produce if P> ATC ;

1.5 points

QUESTION 20

1. In what section of the demand curve is this monopolist producing?

		The elastic section.
		The inelastic section.
		The unitary section.