Fin & Econ Analy
The following figure shows the demand and cost curves facing a firm with market power in the short run.
a. The profit-maximizing level of output is
b. The firm will sell its output at a price of
c. What is the total revenue?
d. What is the total cost?
e. The firm earns profits of
5. Use the following table showing a monopolist’s demand schedule and short-run total cost schedule to answer the questions below.
Price Quantity Total cost$11 0 $40010 60 8009 90 8908 130 1,0507 166 1,2306 196 1,4405 210 1,552
(a) To maximize profit the firm will set a price of $__8_ and sell _130____ units output.(b) Profit (loss) at the profit-maximizing output is $_10_.(c) If the firm reduces price $1 from the profit-maximizing level, marginal revenue is $3.39_ and marginal cost is $5.00_____.(d) If the firm reduces price $1 from the profit-maximizing level, profit (loss) will be $68.00
6. The following figure shows the demand and cost curves facing a firm with market power in the short run.
(a) The profit-maximizing level of output is
(b) The firm will sell its output at a price of
(c) What is the total revenue?
(d) What is the total cost?
(e) The firm earns profits of
8. Use the chart below to answer the following questions
(a) What is the profit maximizing quantity?
(b) What is the price the firm will charge at the profit maximizing point?
(c) What is the breakeven point price for the firm?
(d) Calculate the total revenue
(e) Calculate the total cost
(f) Estimate the total profit for the firm.
13. Refer to the following figure showing demand and marginal revenue for a monopoly.
(a) If production costs are constant and equal to $10, what price will the monopoly charge? Explain.
14. The following graph shows demand and marginal revenue for a monopoly.
(a) At any price above $_______ and quantity below ________ demand will be elastic. Â Marginal revenue is ____________ over this range.
(b) At any price below $_______ and quantity above ________ demand will be inelastic. Â Marginal revenue is _____________ over this range.
(c) Demand is unitary elastic at a price of $______ and quantity of ________. Â Marginal revenue is _____________ at this price-quantity combination.