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Please help to solve the following question. Cigarboro is a monopolist in the cigarette market in Nicotiana Republic, where the Singaporean dollar is used as
Please help to solve the following question.
Cigarboro is a monopolist in the cigarette market in Nicotiana Republic, where the Singaporean dollar is used as the official currency. The firm has a constant marginal cost of $2.00 per pack. The fixed cost of the firm is $50 million. The firm's demand curve can be expressed as P = 8 - 0.04Q, where Q is the quantity demanded (in millions of packs) and P is the price per pack (in $).
- In a table show Cigarboro, the monopolist's demand schedule, total revenue, average revenue, and marginal revenue for prices $2, $4, $6, and $8. (Hint: demand schedule refers to prices and quantity demanded at those prices.
- Based on the table created in answer to part (a), show Cigarboro's average revenue and marginal revenue curves in a graph. Comment on why the MR curve lies below the AR curve in 100 words or less.
- Add marginal cost curve to the graph drawn in part (b). Find out the price and quantity combination of cigarettes packets at which, Cigarboro will maximize its profit.
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