Question 3 - 20 Marks

Assume the industry in Question 2 is now a Monopoly. Now there is only one supplier.

The demand curve in this industry is given by the equation Price, P = $10 - [Q/1,000,000].

Example if Q = 3,000,000 units, Price = $10 - [3,000,000/1,000,000] = $7/unit

1. Draw and label the demand curve and the marginal revenue curve that the monopoly sees on the diagram below. Use the textbook as a guide. 10 Marks