Assume Acme Corporation is a typical monopoly: Construct a graph illustrating Acme’s average and marginal cost...

Assume Acme Corporation is a typical monopoly:

Construct a graph illustrating Acme’s average and marginal cost curves and the demand curve facing it. Identify profit maximizing output and price, total revenues, total costs, and total profits.

Solutions

Expert Solution

A monopoly would set MC=MR for profit maximization so it will produce Q=500 units at a price of P=70

TR=area ABCD

TC=area FECD

Total profits = area ABEF

Rahul Sunny answered 2 years ago

Next > < Previous

Related Solutions

Assume Acme Corporation is a typical monopoly: Construct a graph illustrating Acme’s average and marginal cost...

Assume Acme Corporation is a typical monopoly: Construct a graph illustrating Acme’s average and marginal cost curves and the demand curve facing it. Identify profit maximizing output and price, total revenues, total costs, and total profits. Assume the economy moves into a recession and the demand for Acme’s product falls. On the same graph, show the effect of the recession on equilibrium price, output, and profits. Your response should be one graph and an explanation for the graph.

Assume Acme Corporation is a typical monopoly: Construct a graph illustrating Acme's average and marginal cost...

Assume Acme Corporation is a typical monopoly: Construct a graph illustrating Acme's average and marginal cost curves and the demand curve facing it. Identify profit maximizing output and price, total revenues, total costs, and total profits. Assume the economy moves into a recession and the demand for Acme's product falls. On the same graph, show the effect of the recession on equilibrium price, output, and profits. Your response should be one graph and at least 75 words (1 paragraph) that...

Assume that the paperclip industry is a monopoly and marginal cost is equal to average cost....

Assume that the paperclip industry is a monopoly and marginal cost is equal to average cost. The average and marginal cost of paper clip production is 125, and the interest rate is 10 %. Demand for paperclips is equal to Q=100-2/3 P. What is the optimal quantity, per period CS, and per period license revenues?

Draw a graph for a monopoly with demand, marginal revenue, and marginal cost curves.

Assignment: Draw a graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). (Photos of your work are not accepted) Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why...

Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the...

Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. Identify the consumer surplus of the additional sales. What happens to the firm’s profits and Does price discrimination lead to a more efficient or less efficient outcome?...

A. draw a graph showing the marginal cost, average total cost, demand, marginal revenue, and average...

A. draw a graph showing the marginal cost, average total cost, demand, marginal revenue, and average revenue for a perfectly competitive firm. Indicate the level of profit where profit is maximized, shade in the area of maximum profit, give the amount of maximum profit, and explain how this number is calculated. B.Graph the short-run supply curve for a perfectly competitive firm and explain where this short-run supply curve lies. Indicate the following curves on your graph: marginal cost curve, marginal...

Draw the graph of a profit maximizing monopoly. Be sure to include demand, marginal cost, marginal...

Draw the graph of a profit maximizing monopoly. Be sure to include demand, marginal cost, marginal revenue, the price the monopoly charges and the quantity it sells. Indicate where on this graph the socially efficient production and price would be. Indicate on this graph the deadweight loss. Why is there deadweight loss in a monopoly?

Assume a monopolist firm with diminishing marginal product. Graph the marginal cost curve. Graph the firm...

Assume a monopolist firm with diminishing marginal product. Graph the marginal cost curve. Graph the firm level demand curve. Graph the firm level marginal revenue curve. Identify the profit maximizing quantity to produce and the corresponding price. What does the price function look like if the monopolist can engage in perfect price discrimination?

In using the graph for a monopolist, with demand, marginal revenue, marginal cost, and average total...

In using the graph for a monopolist, with demand, marginal revenue, marginal cost, and average total cost curves, explain how you find the profit maximizing level of output. (Note that this question asks about OUTPUT. The next question asks about PRICE.) Profits are maximized at the quatnity where total revenue is highest above total cost Profits are maximized at the quantity where ATC hits its minimum Profits are maximized at the quantity where marginal revenue equals marginal cost Profits are...

Consider the competitive market for dress shirts. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry.

6. Deriving the short-run supply curve Consider the competitive market for dress shirts. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. For each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between...

Subjects