Question

2. Consider the following hourly demand and cost schedule for a monopoly firm; (Tπ, is Total Profit).

  Q    P             TR          MR          TC          TVC         MC           ATC          AVC         Tπ

                                                                                                                                                             

  0     19                                          $4.00

  1      18                                                                            4

  2      17                                                                            2

  3      16                                                                            1

  4      15                                                                           2

  5      14                                                                           3

  6      13                                                                            4

  7      12                                                                           5

  8       11                                                                           6

  9        10                                                                          7                                                                                                                      ___________________________           

Answer 1

TR = P*Q

MR = TR_n-TR_n-1

TC = MCn+MCn+1

MC = TC_n-TC_n-1

ATC = TC/Q

AVC = TVC/Q

TVC = Sum of MC

Total profit = TR-TC

Q	P	TR	MR	TC	TVC	MC	ATC	AVC	Total Profit
0	19	0	0	4	0	0		0	-4
1	18	18	18	8	4	4	8	4	10
2	17	34	16	10	6	2	5	3	24
3	16	48	14	11	7	1	3.7	2.3	37
4	15	60	12	13	9	2	3.25	2.25	47
5	14	70	10	16	12	3	3.2	2.4	54
6	13	78	8	20	16	4	3.3	2.7	58
7	12	84	6	25	21	5	3.4	3	59
8	11	88	4	31	27	6	3.875	3.375	57
9	10	90	2	38	34	7	4.2	3.8	52