pm3a - Additional Problem 3 Answers: Pure Monopoly Widgets...

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Additional Problem 3 Answers: Pure Monopoly Widgets International, a monopolist, faces a demand curve given by the data in the first two columns of the table below. Its marginal and average costs are constant and equal to $3 per widget produced. There are no fixed costs of production. a. Complete the following table for the various production levels; Q P TR MR MC AVC ATC TC Profit 0r Loss 0 $10 $0 19 9 9 $3 $3 $3 $3 $6 28 1 6 73336 1 0 37 2 1 53339 1 2 46 2 4 3333 1 2 1 2 55 2 5 1333 1 5 1 0 64 24 -1 3 3 3 18 6 73 21 -3 3 3 3 21 0 82 16 -5 3 3 3 24 -8 91 9- 7333 2 7 - 1 8 10 0 0- 9333 3 0 - 3 0 b. What level(s) of production will maximize profit of Widgets International? Q = 4 Total Profit = $12 c. What are the values of MR and MC at the profit maximizing level(s) of production?
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This note was uploaded on 10/26/2009 for the course ECON 180-004-20 taught by Professor Bresnock during the Fall '09 term at UCLA.

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