Question

Complete the following table filling in ALL the cells. When you have finished, graph the results on the blank graph provided. Review the completed graph and answer questions 1-4.

Worksheet - Cost and Industry Structure - Monopoly

Please fill in the empty spaces ion this schedule using the data provided for the quantities, prices and costs

.

Quantity	Price ($)	Total Revenue ($)	Marginal Revenue ($)	Total Cost ($)	Marginal Cost ($)	Average Total Cost ($)	Profit ($)
0	25		n/a	30	n/a	n/a
2	24			35
4	23			45
6	22			60
8	21			77
10	20			100
12	19			126
14	18			165
16	17			210
18	16			260
20	15			320

Using the Schedule above and graph below answer the following questions:

1. What is the Profit maximizing Quantity? ( )

2. What is the Profit maximizing Price? ( )

3. How much are the fixed costs? ( )

4. How much profit will the firm earn at this profit maximizing point? ( )

Answer 1

TR=P*Q

MR = change in TR/change in Q

MC=change in TC/change in Q

ATC = TC/Q

Profit = TR-TC

Quantity	Price ($)	Total Revenue	Marginal Revenue	Total Cost ($)	Marginal Cost	Average Total Cost	Profit
($)	($)	($)	($)	($)
0	25	0	n/a	30	n/a	n/a	-30
2	24	48	24	35	2.5	17.5	13
4	23	92	22	45	5	11.25	47
6	22	132	20	60	7.5	10	72
8	21	168	18	77	8.5	9.63	91
10	20	200	16	100	11.5	10	100
12	19	228	14	126	13	10.5	102
14	18	252	12	165	19.5	11.79	87
16	17	272	10	210	22.5	13.13	62
18	16	288	8	260	25	14.44	28
20	15	300	6	320	30	16	-20

The firm will set MC=MR for profit maximization

Profit maximizing quantity = 12

Profit maximizing price = 19

Fixed costs = TC when Q=0 = 30

Profit = 102