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Response Questions Part A To C Answer the following questions on the basis of the monopolist's situation illustrated in...

Response Questions Part A To C Answer the following questions on the basis of the monopolists situation illustrated in the f

Response Questions Part A To C Answer the following questions on the basis of the monopolist's situation illustrated in the following graph. Dollars. MC АТС S10,67 $8.00 - $7.00 D= AR 100 125 130 150 Quantily a. At what output rate and price will the monopolist operate? b. In equilibrium, approximately what will be the firm's total cost and total revenue? c. What will be the firm's profit or loss in equilibrium?
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Answer
a)
the firm produces at MR=MC
where
Q=100 units and P=10.00 from the demand curve

b)
total revenue =P*Q=10*100=1000

total cost =ATC*Q=7*100=$300

c)
Economic profit =(P-ATC)*Q=(10-7)*100=300

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