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    Monopoly operations

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    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

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    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.

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