Monopoly Part 1: Check Your Understanding- Use the graph of a non-price discriminating monopoly to answer the questions. 1. Identify the profit maximizing price and Price quantity. p= $50 a= 7 $80 2. Calculate the total revenue at the profit maximizing price and quantity. $70 sox7 $350 3. Calculate the total cost at the profit $60 maximizing price and quantity. MC 30x7 = $210 $50 4. Calculate the profit or loss at the profit ATC maximizing price and quantity $40 350 - 210 = 140 5. Calculate the area of deadweight loss.. Show your work. (30) (3) $30 2 6. Identify the socially optimal (or $20 allocationy efficient) price and quantity. $ 35 $10 10 unite 7. Identify the price and quantity where MR D the total revenue is maximized. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 P: 540 Quantity 8. At the price of $70, is the demand relatively elastic, relatively inelastic, or unit elastic? Elastic 9. Assume that the government levies a $15 per unit tax on this monopoly. Identify the profit maximizing price and quantity after the tax is imposed. U : 8 P: 55 10. Assume instead that the government provides this monopoly with a $15 per unit subsidy. Identify the profit maximizing price and quantity after the subsidy. P: ur a : 8 Part 2: Additional Practice- Assume instead that the costs of production changed for this monopoly so that the marginal cost (MC) and average total cost (ATC) for every unit was $50. ofit maximizing price and quantity