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The table below shows the quantity sold and total costs incurred by a monopolist. Price (RM) Quantity sold (units) Total cost (RM) 10 10 50

The table below shows the quantity sold and total costs incurred by a monopolist.

Price (RM) Quantity sold (units) Total cost (RM)

10 10 50

9 15 75

8 20 100

7 25 125

6 30 150

(a) From the above table, how do you know that the monopolist is a price searcher

rather than a price taker? (5 marks)

(b) Calculate the marginal revenue (MR) and marginal cost (MC) for each level of

output. (6

marks)

(c) What is the criterion used by the monopolist to determine its profit-maximising

output level? (3

marks)

(d) Determine the profit-maximising output, price and profit earned by the

monopolist. (5

marks)

[Source: Jan/Feb 2008/09]

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