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Additional Problem #6 Answers : Pure Monopoly and Price Discriminating Monopoly Answer each question in the spaces provided. Show all work utilized to reach your answers in the work spaces provided. Given the following output (Q), price = average revenue (P=AR), and total cost (TC) data facing a firm, complete the questions that follow. Q P = AR TC TR Total Profit or Loss MR MC ATC 0 \$16 \$15 - \$ -15 --- 1 14 20 \$14 -6 \$14 \$5 \$20 2 12 24 24 0 10 4 12 3 10 27 30 3 6 3 9 4 8 29 32 3 2 2 7.25 5 6 32 30 2 -2 3 5.33 6 4 36 24 -12 -6 4 6 7 2 41 14 -27 -10 5 5.86 a) Is the market structure here perfect or imperfect competition? Imperfect Competition . Explain your reasoning for this answer below. P = AR > MR To Q must P Is the firm operating in the short run or long run? Short Run . Give two reasons for this conclusion. (1) Presence of fixed costs Æ TFC = \$15 (2) Diminishing returns Æ MC ing b) What is the equilibrium output for this firm? 4 . What is the equilibrium price for this firm? \$8 . Confirm your answer with a brief explanation using both the total and marginal approaches in the space below.

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