The following table indicates the prices various buyers are willing to pay for a MINI Cooper car:

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The following table indicates the prices various buyers are willing to pay for a MINI Cooper car:

Buyer Maximum Price Buyer Maximum Price Buyer A $50,000 Buyer D $20,000 Buyer B 40,000 Buyer E 10,000 Buyer C 30,000 Buyer F 0 The cost of producing the cars includes $40,000 of fixed costs and a constant marginal cost of $10,000.

(a) Graph below the demand, marginal revenue, and marginal cost curves.

(b) What is the profit-maximizing rate of output and price for a monopolist?

(c) How much profit does the monopolist make?

(d) If the monopolist can price discriminate, how many cars will he sell?

(e) How much profit will he make?

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The Micro Economy Today

ISBN: 9781118152003

15th Edition

Authors: Bradley R. Schiller, Karen Gebhardt

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