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Monopoly Pricing Monopoly Pricing $17 10 MC ATC $/Unit MR LAR 6 7 8 9 10 11 12 Q Use the graph Monopoly Pricing to
Monopoly Pricing Monopoly Pricing $17 10 MC ATC $/Unit MR LAR 6 7 8 9 10 11 12 Q Use the graph Monopoly Pricing to answer these questions. 1. What is the maximum profit output? 2. What is the price at that output? 3. What is revenue per unit at that output? 4. What is cost per unit at that output? 5. What is total revenue at that output? 6. What is total cost at that output? 7. What is profit or loss per unit at that output? 8. What is total profit or loss at that output? 9. At what output and price combination would this firm break even? 10. If this were a perfectly competitive industry (other than the fact that demand would be perfectly elastic), excess profits would exist and new firms would enter the industry. Since this is a monopoly situation and new firms cannot enter the industry, what will happen to these excess profits? 1 1. Based on your answer to question 10. if this monopoly were a government- regulated monopoly and you were the government, what restrictions, regulations, or requirements would you place on this company? Exercise developed by James Chasey, Homewood-Flossmoor High School. Flossmoor, IL
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