Question

need some help with all of this.

ert Format Arrange View Share Window Help HW9monoA (1) TT Insert Table Chart Text Shape Media D 126% Zoom + Add Page View Comment Cole 60 On the left is your monopoly. 1)If you handle your customers without any discrimination and maximize your profits, then where MC crosses MR below this will be your of_This Qapplied to the PD (price, demand) curve will result in price of $_which at that quantity is above ATC of $_ by $ __and is your profit per unit. This profit per unit the MC-MR quantity results in a non-discriminatory profit of $_ 2)lf society is offended by your profits, they may require you to release a Q where PATC which happens over Qof- and results in zero profits (no loss, no profit). 0 90 100 110 120 3)it may be argued by the government or in court that every unit before 1100 ought to be produced because its minimum benefit (P) is greater than its cost (MC) and satisfies allocative efficiency. Producing where MC=P happens at , but results in ATC of $_ which is higher than current P of $ _ by $___ each (which multiplied by corresponding Q) makes for a total loss of $__. 4)lt may also be argued that ATC must be minimized, which happens where MC=ATC, and satisfy technological productive aff. However when ATC=MC, ATC equals $_which is much higher than corresponding price of $___ The difference between ATC-P makes for a per unit loss of $__times corresponding of __for a total loss of $ 5)Price discrimination maximizes profits by releasing the allocatively efficient quantity of 1100. Average price equals ((highest P+ alloc Pyalloc Q) which is ($60+3072= _ minus corresponding ATC of $_for a per unit profit of $ _'1100 for a total discriminatory profit of $_ (Now do two new examples here and on the back!) TR P Q TC MC ATC profit 120 1 130 1 satisfies 150 180 1 1 1 1 1 1 Under discrimination Q = so TC = allocat. fair, prodati, profit max 210 nothing satisfied while TD ons 1000 +_+_= and profit 571 words w w w.vr 30 30 30 34 36 38 40 40 44 45 48 50

Answer 1

1. a) 90 units

b) $ 48

c) $ 44

d) Profit per unit = Price - ATC at quantity of 90 units = 48 - 44 = $ 4

e) Profit = (48 - 44) x 90 = 4 x 90 = $ 360

2. a) 100 units

At 100 units, price and ATC is $ 42 so firm is neither earns profit nor suffers loss.

3. a) 110

b) $ 36

c) $ 30

d) 36 - 30 = $ 6

e) Total loss = $ 6 x 110 units = $ 660

4. a) $34

b) $ 18

c) Loss per unit = 34 - 18 = $ 16

d) Total loss = loss per unit x Quantity = 16 x 120 = $ 1920