Profit per unit
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a. What is the optimal price?
b. What is the Profit per unit
c. What is the ATC in dollars?
d. If the monopolist were to behave like a perfectly competitive irm(operating in the long run), determine its price.
How do you arrive at each?
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Solution Summary
The optimal price for a unit is determined. The profit per unit and ATC in dollars are calculated. If the monopolist were to behave like a perfectly competitive irm, the price is determined.
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a. The optimal quantity is E, where MC=MR. The optimal price is found by looking at the highest price that the consumers are willing to pay for this quantity. To do this, look vertically up from E to the demand curve where you'll find J. Price corresponding to poin J is A. So, the optimal ...
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