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Module 5 chp 25 Number 14

# Module 5 chp 25 Number 14 - Revenue A monopolist produces...

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Price (P) \$10.00 0 \$- \$- \$- \$9.00 1 \$9.00 \$9.00 \$4.00 \$8.00 2 \$16.00 \$7.00 \$8.00 \$7.00 3 \$21.00 \$5.00 \$12.00 \$9.00 \$6.00 4 \$24.00 \$3.00 \$16.00 \$8.00 \$5.00 5 \$25.00 \$1.00 \$20.00 \$4.00 6 \$24.00 \$(1.00) \$24.00 \$3.00 7 \$21.00 \$(3.00) \$28.00 \$2.00 8 \$16.00 \$(5.00) \$32.00 \$1.00 9 \$9.00 \$(7.00) \$36.00 0 10 \$- \$(9.00) \$40.00 Quantity (Q) Total Rvenue (TR) Marginal Revenue (MR) Variable Cost (=MC*Q) Net

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Unformatted text preview: Revenue A monopolist produces that level of ouput for which MR=MC. Given MC=\$4 As per the figures computed, MR is never exactly equal to \$4. Thus, the monopolist will produce, 3 units of output and earn greater net revenues (or profit, in the absence of fixed costs) as compared to at 4 units of output. Therefore, equilibrium Q = 3 and P = \$7....
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