Answer:
What is marginal revenue when quantity is 30 ? 30?
= ($2,400 - $1,350) / (30 - 15) = $900 / 15 = $70
What is marginal cost when quantity is 60 ? 60?
= ($3,150 - $2,250) / (60 - 45) = $900 / 15 = $60
If this firm is a monopoly, at what quantity will profit be maximized?
a monopoly maximizes its accounting profit when marginal revenue = marginal cost, in this case they both equal $50 per unit when total output is 45 units
If this is a perfectly competitive market, which quantity will be produced?
a perfectly competitive firm maximizes its accounting profit when marginal revenue = marginal cost, in this case they both equal $50 per unit when total output is 45 units
Comparing monopoly to perfect competition, which statement is true?
- The consumer surplus is smaller with a monopoly.
- The monopoly's price is higher.
In a monopoly, output is smaller than the perfectly competitive output. The price charged by a monopolist is also higher. This also results in lower consumer surplus with a monopoly.
Explanation:
Quantity Price Total Revenue Total Cost
15 90 1350 900
30 80 2400 1500
45 70 3150 2250
60 60 3600 3150
75 50 3750 4200
90 40 3600 5400
