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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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