Task 2 Suppose the market demand for titanium is: Price ($ per Quantity megatonne) (megatonnes) 80 0 70 1 60 2 50 3 40 4 30 5 20 6 10 0 8 Also suppose that titanium is supplied to the world market by a monopolist. Assume that the marginal cost of supplying an extra megatonne of titanium is $20, and that the fixed cost of production is $60 a) Present a table that shows Variable cost, Total Cost, and Average Total Cost of supplying from 0 to 8 megatonnes of titanium. Graph the Average Total Cost curve. How can you explain the shape of the curve? b) What will be the profit-maximizing quantity of titanium for the monopolist to supply? What will be the profit-maximising price? What level of profits will be earned by the monopolist? 19