Question

The graph below represents a monop olist company Botanical Gardens. Use this graph to an 3) swer the following questions. Price and cost per unit 32 22 20 18 . 15 Quantity 50 70 80 90 45

Identify and label all 4 curves in the above graph.                         

1. What is Botanical Garden’s profit-maximizing quantity and what price will it charge for it?
2. What is Botanical Garden’s total revenue at the profit maximizing level? Show your calculations and the unit of account of the answer.
3. What is Botanical Garden’s total cost at the profit maximizing level? Show your calculations and the unit of account of the answer.

                                 

Answer 1

3) The graph below represents a monopolist company Botanical Gardens. Use this graph to an- swer the following questions. Price and cost per unit MC ATC MR 50 70 80 90 Quantity

a) Setting MC=MR, the profit maximizing quantity = 50 and price = 32

b) Total revenue = P*Q = 32*50 = 1600

c) Total cost = ATC*Q = 20*50 = 1000