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

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
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
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

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

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online