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Unformatted text preview: profit is $ 5 . After a given time period, due to investment and technological advances, which cost the monopolist an increase in TFC, results in a cost of production decrease to ATC2 and its corresponding supply to MC2 . The monopolist, then, in the absence of price regulation by the government, would like to produce 15 units and charge a unit price of $ 25 . However, due to quality improvements and effective advertising, the demand increases to D2 , while its corresponding marginal revenue is MR2 , with ATC2 and MC2 remaining unchanged. The monopolist, therefore, produces and sells approximately 15 units at $ 55 per unit. His/her total profit is now approximately $ 50 ....
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- Spring '08
- Microeconomics, AFC, average variable cost, Average Fixed Cost