# Monopoly operations

Use the following data for a pure monopoly to calculate the firm's:

(a) total revenue, marginal revenue, marginal costs, and average total cost;

(b) its profit-maximizing output level and produce price;

(c) its profit.

(d) Use the price-cost formula to determine whether or not the firm's operations are productively-efficient.

(e) Use the price-cost formula to determine whether or not the firm's operations are allocatively-efficient.

Q (P = AR) TR MR TC MC ATC

0 $120 $100

1 119 200

2 118 280

3 117 340

4 116 380

5 115 400

6 114 460

7 113 560

8 112 665

https://brainmass.com/economics/monopolies/374680

#### Solution Preview

Please refer attached file for better clarity of table.

a)

Q P=AR TR MR TC MC ATC Profit TR-TC

0 120 0 100 -100

1 119 119 119 200 100 200.00 -81

2 118 236 117 280 80 140.00 -44

3 117 351 115 340 60 113.33 11

4 ...

#### Solution Summary

Solution describes the steps to find out the profit maximizing output level and associated profit. It also checks if the firm's operations are productively and allocatively efficient.