pmap1ans

# pmap1ans - 1 Additional Problem 1 Pure Monopoly Using the...

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1 Additional Problem 1: Pure Monopoly Using the following information, complete the table below. Q TC MC P MR AR TR Total Profit 0 \$10 \$10 \$-10 1 16 6 9 \$ 9\$ 9 - 7 2 20 4 87 8 1 6 - 4 3 25 5 75 7 2 1 - 4 4 32 7 636 2 4 - 8 5 42 10 515 2 5 - 1 7 6 56 14 4- 142 4 - 3 2 7 75 19 3- 332 1 - 5 4 8 100 25 2- 521 6 - 8 4 9 132 32 1 -7 1 9 -123 a) Determine the price and output selection for this imperfectly competitive firm. Is this a short-run or long-run equilibrium? Why? P MIN = \$7 ATC = \$8.30 Q MIN = \$3 - AR = \$7.00 Total Loss = \$4 Per Unit Loss = \$1.30 Total Loss = \$1.30 x 3 = \$3.90 \$4.00 b) Utilize the TR and TC approach to graphically illustrate the equilibrium results for this firm. TC \$ TR TFC Total Loss = \$4 Q 0 3 Q MIN

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2 c) Calculate the ATC and AVC for this firm. At equilibrium does this firm earn a profit, loss, or break-even? If profit or loss what are the unit and total profits or losses? Q TC TFC TVC ATC AVC 0 \$10 \$10 1 16 10 \$6 \$16 \$6 2 20 10 10 10 5 3 25
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pmap1ans - 1 Additional Problem 1 Pure Monopoly Using the...

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