Quantity: 1 2 3 4 5. Price: $30, $25, $20, $15, $10. Total Cost: $3, $7, $12, $18, $25. 1) To...
Question:
Use the following data on quantity, price, and total cost to answer the questions below.
Quantity: 1 2 3 4 5
Price: $30, $25, $20, $15, $10
Total Cost: $3, $7, $12, $18, $25
1) To maximize profit, the monopolist sets price at _ .
2) The marginal revenue of the second unit is .
3) The marginal cost of the fourth unit is .
4) The maximum profit this monopolist can earn is .
Costs, revenue and profit of a monopoly.
As any other types of market structures, a monopoly wants to maximize its profit. For this, it has to produce at the level (Q) where marginal revenue is equal to marginal cost (or is as close to it as possible). To calculate the actual profit of a monopoly, one needs to find the difference between its total revenue and total cost at the optimal Q.
Answer and Explanation: 1
1) To maximize profit, the monopolist sets price at _ .
To make answering all of these questions easier, we can create a table, in which P, Q and TC are given.
Everything else is calculated as following, where TR - total revenue, MR - marginal revenue, MC - marginal cost.
TR = P * Q
 |
 |
 |
Profit is maximized at Q where MR = MC or is as close to it as possible.
Here, at no Q is MR equal to MC, but the smallest positive difference between the two is at Q = 3 ( MR - MC = 5 )
When Q = 3, P = 20.
2) The marginal revenue of the second unit is _.
From the 5th column of the table, when Q = 2, MR = 20.
3) The marginal cost of the fourth unit is .
From the 6th column of the table, when Q = 4, MC = 6.
4) The maximum profit this monopolist can earn is .
Per part 1), the maximum profit would occur at Q = 3.
Profit = TR - TC
when Q = 3, profit = 60 - 12 = 48.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
What is a Monopoly in Economics? - Definition & Impact on Consumers
from
Chapter 7 / Lesson 2
36K
Understand the meaning of a monopoly in economics and what it does. Also, know the characteristics of a monopoly and the different types of monopolies.
Related to this Question
- A monopolist maximizes its profit when: A) the total revenue is maximized. B) the price is the highest. C) the total cost is minimized. D) the marginal revenue is equal to the marginal cost. E) the quantity sold is equal to the price.
- A profit maximizing monopolist's price is $15 per unit. At this point (absolute) value of the price elasticity (n) is 2. calculate his marginal cost.
- Quantity Total Revenue Total Cost Profit Marginal Revenue Marginal Cost 0 $0.00 $7.00 - - 1 $11.00 $12.00 $11.00 $5.00 2 $22.00 $18.00 $11.00 $6.00 3 $33.00 $25.00 $11.00 $7.00 4 $44.00 $33.00 $11.0
- 1. What is the profit maximizing quantity and price of this monopolist? b. If at the profit maximizing quantity, the average total cost is 100, what is the total cost? Is the monopolist making a profi
- If a monopolist's marginal revenue is MR = 15.5 - 3Q and its marginal cost is MC = 5, then what is the profit-maximizing quantity?
- If a monopolist's marginal revenue is MR=22-4Q and its marginal cost is MC=4 then the profit-maximizing quantity is what?
- At the quantity where a single-price monopolist maximizes profit, price will be.. a. equal to marginal cost. b. equal to marginal revenue. c. less than marginal cost. d. greater than marginal cost. e. less than marginal revenue.
- The profit-maximizing single-price monopolist will charge a price a. equal to marginal revenue. b. greater than marginal cost. c. less than marginal revenue, but greater than marginal cost. d. gre
- Complete the Marginal Revenue of the table Price 15 13 11 9 7 5 3 1 Quantity Demanded 1 2 3 4 5 6 7 8 Marginal Revenue If marginal cost is constant at $13, a. what is the profit-maximizing rate of o
- A monopolist has total cost TC = 200 + .5 Q2. Marginal cost is Q and the market demand is Q = 100 - P/2. 1) What is marginal revenue? 2) What quantity maximizes profits? 3) What is the price in th
- The monopolist's profit-maximizing quantity of output is determined by the intersection of which following two curves: a. Marginal cost and demand, b. Marginal cost and marginal revenue, c. Average total cost and marginal revenue, d. Average variable
- Price times quantity minus total cost equals A. total revenue. B. fixed costs. C. marginal revenue. D. profit.
- At the profit-maximizing quantity, the firm's marginal cost is $40 and it charges a price of $60. What is the price elasticity of demand at the profit-maximizing quantity?
- 1. What is the Quantity that maximizes profit? a. 0 b. 8 c. 10 d. 9 2. At the profit-maximizing quantity, what is the Total Cost (TC)? a. $20 b. $320 c. $152 d. $488 3. At the profit maximizing quantity, what is Marginal Cost (MC)? a. $62 b. $5
- For a monopolist that is maximizing profits, A. price equals average total cost. B. price equals marginal revenue. C. marginal revenue exceeds price. D. price exceeds marginal cost.
- The monopolist's profit-maximizing quantity of output is determined by the intersection of which of the following two curves: a. Marginal cost and demand, b. Marginal cost and marginal revenue, c. Average total cost and marginal revenue, d. Average variab
- The profit-maximizing quantity for a monopolist is found where marginal revenue equals marginal cost. How does the monopolist find the profit-maximizing price? a. It is equal to the height of the supply curve at the profit-maximizing quantity. b. It is eq
- Total revenue minus total cost equals: a. quantity. b. change in profit. c. marginal cost. d. marginal revenue. e. profit.
- A monopolist will maximize its profit, when its: a) Total revenue is maximum. b) Marginal revenue is maximum. c) Marginal cost is equal to marginal revenue. d) Total cost is maximum.
- The total cost (TC) and inverse demand equations for a monopolist are: TC=100+5Q^2 P=200-5Q a. What is the profit-maximizing quantity? b. What is the profit-maximizing price? c. What is the monopolist's maximum profit?
- A monopolistic competitor will maximize profits by producing the quantity of output where a) marginal revenue is equal to marginal cost. b) marginal revenue is maximized. c) total revenue is maximized. d) price is maximized.
- The quantity that will maximize profit for monopolists will occur where ____. a. total cost exceeds total revenue by the maximum amount. b. marginal cost rises to equal marginal revenue. c. price equals marginal cost. d. marginal revenue exceeds the margi
- A profit-maximizing monopolist charges a price of $12. The intersection of the marginal revenue and the marginal cost curves occurs where output is 10 units and marginal cost is $6. Average total cost for 10 units of output is $5. What is the monopolist's
- A profit-maximizing monopolist faces the demand curve q= 100 - 3p. It produces at a constant marginal cost of $20 per unit. A quantity tax of $10 per unit is imposed on the monopolist's product. The price of the monopolist's product: a. rises by $5. b.
- a) How many units of output should the firm produce in order to maximize profits? Briefly explain why. b) What price per unit should the monopolist charge? Briefly explain why. c) What is the firm's total fixed cost? d) What is the total average cost per
- A single-product monopoly has marginal revenue and marginal cost equal to $19 at 15 units of output, where the price on the demand curve is $38. At this output, the average total cost is $15. What is the monopolist's profit?
- If the price is $5, the marginal cost is $5, the average total cost is $3, and the quantity produced is 150 units, then the perfectly competitive firm is: a. Earning $750 in economic profits and is maximizing economic profits, b. Earning $300 in economic
- a. Find the total revenue and marginal cost in both situations. b. With a $1.60 unit cost, what is the firm's profit maximizing production?
- Total revenue equals: a. Marginal revenue - marginal cost, b. Price/quantity, c. Price x quantity, d. Output - input,
- A profit-maximizing monopolist is charging $15 and selling 10 units of output. Its marginal cost is $10, and its marginal revenue is $10. At the quantity, its average variable cost is $10 and average
- If marginal costs are zero, a monopolist will maximize profit by producing at the point where a) average revenue is zero. b) price is maximum. c) total revenue is maximum. d) marginal revenue is maximum.
- The demand for a monopolist s output is 6,000/(p + 3)^2, where p is its price. It has constant marginal costs equal to $6 per unit. What price will it charge to maximize its profits? a. $9 b. $18 c. $21 d. $15 e. $6
- If marginal costs are constant at $6, what is the profit-maximizing monopolist price?
- For a monopolist, marginal revenue is less than price, which means that profit maximisation will result in (blank) also being less than price. (a) average revenue (b) marginal cost (c) total revenue (d) total cost (e) average cost
- In the profit-maximizing monopolist sets it price: A. higher than a competitive market would. B. equal to marginal cost. C. where marginal costs equals marginal revenue. D. at whatever price it wants
- The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing level of production?
- 1. A monopolist faces an upward-sloping marginal cost curve. Its profit-maximizing quantity will be a. at the minimum point of the marginal cost curve. b. less than the (total) revenue-maximizing qua
- The marginal cost for a monopolist is 5 and the price elasticity of demand (in absolute terms) is 4. What is the profit -maximising price? a. P = 8 b. P = 10 c. P = 12 d. P = 4 e. P = 16
- For a profit-maximizing monopolist, price A. equals marginal revenue. B. is less than marginal revenue. C. is greater than marginal revenue. D. can be greater than or less than marginal revenue.
- Profit-maximizing firms want to maximize the difference between: a) total revenue and total cost. b) total revenue and marginal cost. c) marginal revenue and average cost. d) marginal revenue and marginal cost.
- At a price of $20, the marginal revenue of a monopolist is $6. If the marginal cost of production is $4, what should the monopolist do in order to maximize profits? a. increase its price b. decrease its price c. keep its price at the same level
- Price Quantity Total Revenue Total Cost 15 1 15 3 14 2 28 7 13 3 39 12 12 4 48 18 11 5 55 25 10 6 60 33 What is the marginal revenue associated with the sale of the 5th unit of the good? A. $55 B. $8 C. $7 D. $48 E. $4
- If, at the output where marginal cost equals marginal revenue, both a pure competitor's and a monopolist's marginal revenue is $5.00: A) both sellers' profit-maximizing price will be $5.00. B) both sellers' profit-maximizing price will be greater than $
- A monopolist has demand and cost curves given by: Q_D = 1000 - 2P \\ TC = 5,000 + 50Q a. The monopolist's profit-maximizing quantity is [{Blank}] units and the price is $[{Blank}], b. The monopolist's profit is $ [{Blank}].
- What is the profit-maximizing quantity for the monopolist when marginal revenue is MR = 100 - 5Q, demand is P = 100 - \frac {1}{2}5, variable cost is 60 + \frac{1}{2} 8 Q^2 , and marginal cost is MC = 8Q ?
- Maximizing Total Revenue and maximizing Total Profit are the same goal when: Select one: a. Price elasticity is inelastic b. When the price is low c. Cost per unit is high d. There are zero costs
- A monopolist's profit-maximizing price and output correspond to the point on a graph A. where the price is as high as possible. B. where the average total cost is minimized. C. where marginal revenue equals
- MICROECONOMICS A monopolist faces a demand curve P = -20Q + 10 and MR = -4Q + 10. Total Cost = 2d (no fixed cost) and MC = 2. a) What is the monopolist's profit-maximizing production quantity (Q*)?
- A monopolist with total cost function c(Q) = 4 + 3 Q + 1/2Q^2 faces a market demand function of QD(P) = 60-4P. a) Calculate the monopolist's profit-maximizing price and quantity sold, and the monopol
- A monopolist faces a demand curve: P = 100 - Q for its product. The monopolist has fixed costs of 1000 and a constant marginal cost of 4 on all units. Find the profit maximizing price, quantity, and p
- Since price [{Blank}] for a monopoly firm, the profit-maximizing monopoly firm does not produce the quantity of output for which price equals marginal cost. a. does not equal marginal revenue, b. does equal marginal revenue c. is higher for a perfectly
- In maximizing profits, a single-price monopolist will charge a price that is: a. Less than marginal cost, b. Equal to marginal cost, c. Greater than marginal cost, d. There is not enough information to answer the question.
- A monopolist's profit maximizing price is $15. At MC = MR, the output is 100 units and the MC is $10. At this level of production, average total costs are $12. What is the monopolist's profit?
- What is the profit maximization condition for a monopoly? a. Where marginal cost is minimized. b. Where total revenues are maximized. c. Where price equals marginal cost. d. Where marginal revenue equals marginal cost.
- Both a perfectly competitive firm and a monopolist a. always earn an economic profit. b. maximize profit by setting marginal cost equal to marginal revenue. c. maximize profit by setting marginal cost equal to the average total cost. d. are price take
- In which situation would a profit-maximizing firm shut down temporarily? A. total fixed cost is greater than total revenue at all quantities. B. At the quantity where marginal revenue equal marginal cost, marginal revenue is less than average variable c
- If a monopolist is producing a quantity where marginal revenue is equal to $32 and the marginal cost is equal to $30, the monopolist should: a. increase production and increase the price to maximize profits. b. decrease production and increase the price
- A 1-price profit-maximizing monopolist faces the following demand and cost for its product. Assume the good can only be produced in whole quantities. Find the profit-maximizing quantity, price, and profit. Explain why the value you calculated for profit,
- A monopolist is able to maximize its profits by: A. setting the price at the level that will maximize its per-unit profit. B. producing output where MR = MC and charging a price along the demand curve. C. setting output at MR = MC and setting price at
- A monopolist is able to maximize its profits by A. setting the price at the level that will maximize its per-unit profit. B. producing output where MR = MC and charging a price along the demand curve. C. setting output at MR = MC and setting the price at
- Cost, revenue, and profit are in dollars and x is the number of units. A firm knows that its marginal cost for a product is M C 4 x 20, that its marginal revenue is M R 70 6 X , and that the cost of
- Both a perfectly competitive firm and a monopolist a. always earn an economic profit. b. maximize profit by setting marginal cost equal to marginal revenue. c. maximize profit by setting marginal cost equal to average total cost. d. are price takers.
- Suppose a profit-maximizing monopolist is producing 1100 units of output and is charging a price of $55.00 per unit. If the elasticity of demand for the product is -1.5, find the marginal cost of th
- Marginal cost is: a. the change in total costs because of a one-unit increase in output. b. total cost divided by the rate of output. c. total revenue minus total cost. d. the average profit divided by the quantity sold.
- To maximize profits, a monopolist chooses the quantity where: a. marginal revenue equals zero. b. revenues are maximized. c. marginal cost equals zero. d. marginal revenue equals marginal cost. e. costs are minimized.
- A monopolist will maximize profit by producing the level of output at which a. marginal revenue equals marginal cost. b. the last unit of output produced adds the same amount to total revenue as to to
- Microeconomics At the output level that a monopolist produces to maximize profit? A. marginal cost equals marginal revenue. B. price is higher than marginal revenue. C. price equals marginal cost.
- To maximize profits, a monopolist chooses the quantity where: a. costs are minimized. b. marginal cost equals zero. c. marginal revenue equals zero. d. marginal revenue equals marginal cost. e. revenues are maximized.
- 1. Suppose you are a monopolist and the downward-sloping demand curve you face takes the form: P=30-3Q: Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost Profit 0 1 2
- What price and quantity will the monopolist produce at if the marginal cost is a constant $4?
- A monopolist can produce at a constant average (and marginal) cost of AC= MC= $5. It faces a market demand curve given by Q=53-P. a. Calculate the profit-maximizing price and quantity for this monopolist. Also, calculate its profits. b. Suppose a second
- Assume that a monopolist sells a product with a total cost function TC=1200+1/2Q2. The market demand is given by the equation P=200-Q. a) Find the profit-maximizing output and price for this monopolis
- A monopolist has set her level of output to maximize profit. The firm's marginal revenue is $20 and the price elasticity of demand is -3.0. Which of the following prices or price ranges describe the firm's profit-maximizing price? A. $0-9 B. $10-19 C. $20
- The market demand and marginal cost functions for a product sold by a monopolist are given below: Demand: QD = 100 - 2P Marginal Cost: MC = 1.5Q Based on this information, calculate the profit-maximizing price and quantity and the revenue-maximizing pr
- If the monopolist has total fixed costs of $40 and a constant marginal cost of $5, what is the profit-maximizing level of output? A. 23 units B. 16 units C. 31 units D. 7 units
- Suppose that a monopolist faces a linear demand given by Q(p) = 100 - 2p. The monopolist also pays a marginal cost of $1 for each unit produced. What is the optimal quantity that the monopolist will charge to maximize its profits?
- Suppose that a monopolist faces linear demand given by Q(p) = 1000 - 5p. The monopolist also pays a marginal cost of $10 for each unit produced. 1. What is the optimal quantity that the monopolist will charge to maximize its profits? a. 450 b. 475 c. 500
- Suppose that a monopolist faces linear demand given by Q(p) = 100 - 2p. The monopolist also pays a marginal cost of $1 for each unit produced. 1. What is the optimal quantity that the monopolist will charge to maximize its profits? A. 99 B. 49 C. 100 D. 5
- If a monopolist is producing a quantity where marginal revenue is equal to $125 and the marginal cost is equal to $125, the monopolist should [{Blank}] to maximize profits. a. Increase production and lower the price, b. Decrease production and increase
- If, at the output where marginal cost equals marginal revenue, both a pure competitor's and a monopolist's marginal revenue is $5.00: A) both sellers' profit-maximizing price will be $5.00. B)) both s
- Profit is: a. increased when marginal revenue is greater than marginal cost b. maximized when marginal revenue is greater than marginal cost c. equal to ((price - average cost) x quantity)
- A monopolist faces the following demand, as shown in the table. It has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing price? | Price | Quantity | $51 | 1 | $47 | 2 | $42 | 3 | $36 | 4 | $29 | 5 | $21 |
- A monopolist faces the following demand curve: P = 140 - 0.3Q , its total cost is given by: TC = 300 + 0.2Q^2 and its marginal cost is given by: MC = 0.4Q. (a) If it is a single-price monopolist, what is its profit-maximizing price and quantity? Show
- In monopolistic competition, profit is maximized by producing so that marginal revenue: A) equals price. B) equals average total cost but not marginal cost. C) equals marginal cost and which are less than price. D) is negative. E) equals marginal cost and
- Suppose the demand curve for a monopolist is QD= 47,000 - 50 P, and the marginal revenue function is MR=940 - 0.04Q. The monopolist's Marginal Cost = 40+ 0.02Q and its Total Cost = 250,000+ 40Q+ 0.01Q^2. a. Find the monopolist's profit-maximizing output
- For a monopolist, the price of a product: a) Is less than the marginal revenue. b) Exceeds the marginal revenue. c) Equals the marginal cost. d) Equals the marginal revenue.
- How much Profit will the firm make? Refer to the table below. Quantity Total Revenue Total Cost Profit Marginal Revenue Marginal Cost 0 $0.00 $7.00 - 1 $11.00 $12.00 $11.00 $5.00 2 $22.00 $18.00 $11.0
- For a single-price monopolist, marginal revenue falls faster than price (as output rises) because: a) in order to sell additional units, the price must be lowered on all units. b) profits are maximized when marginal cost equals marginal revenue. c) the fi
- Marginal revenue could equal price for a profit-maximizing firm _____.
- A monopolist can produce quantity Q of product at total cost of C(Q) = (10,020)Q + Q^2. The demand schedule for the product is Q = 1/3(140P) where P is the price charged for the product. Find the profit maximizing output (Q) and the maximum profit.
- If a monopolist is producing a quantity where marginal revenue is equal to $32 and the marginal cost is equal to $30, the monopolist should
- Consider total cost and total revenue given in the following table. a. Calculate profit for each quantity. How much should the firm produce to maximize profit? b. Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the
- A monopolist faces the demand curve P = 100 - 2Q, where P is the price and Q is the quantity demanded. If the monopolist has a total cost of C = 50 + 20Q, determine its profit-maximizing price and output.
- What is the profit-maximizing output and price for the monopolist?
- Do firms really calculate marginal cost and marginal revenue to find the profit-maximizing output?
- Will a monopolist ever maximize profits at a price-quantity combination where demand is inelastic?
- A profit-maximizing monopolist produces an output level at which ________. (a) marginal revenue is the greatest distance from marginal cost (b) price is less than the marginal cost (c) the value to society of the last unit produced equals marginal cost (d
- a. What price should the monopolist charge? b. What is the deadweight loss? c. What is the Price Elasticity of Demand at the profit-maximizing price and quantity?
- Suppose the demand curve for a monopolist is Q_D = 47,000 - 50P and the marginal revenue function is MR = 940 - 0.04Q. The monopolist's marginal cost is MC = 40 + 0.02Q and his total cost is TC = 250,000 + 40Q + 0.01Q^2. A.. Find the monopolist's profit-m
Explore our homework questions and answers library
Browse
by subject