1.should these monopolists increase or decrease output, increase or decrease price, and on what information is...

1.should these monopolists increase or decrease output, increase or decrease price, and on what information is your answer based? Can the monopolists maximize profits minimize a loss ,or should they shutdown? Give a reasons for your answers based on the numbers in the rows

Price	MR	Q	TR	TC	P/L	TVC	ATC	AVC	MC
10	5	10	100	50	+50	30	5	3	7
50	<50	50	2500	2600	-100	1600	52	32	50
10	5	1000	10000	8000	+2000	5000	8	5(min)	5
90	70	25	2250	1500	+750	750	60	50	50

Solutions

Expert Solution

The firm maximizes its profits at Q = 1000 with MR=MC=5. The price at this point is 10 which is above the min of AVC(5). This means that firm should continue operations and not shut down at this level. Please see explanation for each row in the remarks column.

Rahul Sunny answered 1 year ago

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