b). How would your answer change if, in response to an increase in demand, the price of the good increased to $15?

2) A monopolist with a straight-line demand curve finds that it can sell two units at $12 each or 12 units at $2 each. Its fixed cost is $20 and its marginal cost is constant at $3 per unit.

a) Draw the MC, ATC, MR, and demand curves for this monopolist.

b) At what output level would the monopolist produce?

c) At what output level would a perfectly competitive firm produce?

3) Suppose a monopolistic competitor in long-run equilibrium has a constant marginal cost of $6 and faces the demand curve given in the following table:

Q 20 18 16 14 12 10 8 6
P $ 2 4 6 8 10 12 14 16

a. What output will the firm choose?
b. What will the monopolistic competitor's average Fixed cost at the output it chooses?

3) The pizza market is divided as follows

Pizza Hut 20.7%
Domino's 17.0
Little Caesars 6.7
Pizza Inn/Pantera's 2.2
Round Table 2.0

a) How would you describe its market structure?
b) What is the approximate Herfindahl index?
c) What is the four-firm concentration ratio?

Economics Output Maximization and Profit Maximization. ... Please see the attached file. Economics Output Maximization and Profit Maximization are explored. ...

... Marginal Revenue and Marginal Cost: Third, profit maximization can be ... price as well as the profits until all ... in the industry make a normal profit (break even). ...

... a. What price should the firm charge if it wants to maximize its profits in the short run? The profit maximization price is determined by the rule MR=MC. ...

... Based on these average net profit margins, which company ha done a better job of maximizing profits? Average net profit margin for GE = (10.92%+11.00%+11.18 ...

... Solution: A monopolist sets its output such that MR=MC to maximize its profits. ... intersects at point where MR=MC=2 and Q=10000 a) Profit maximizing output level ...

... At Output level of 3, MC=MR=$12, Profit =$0 Since Sear's enjoys a monopoly, it can enjoy economic profits, profit maximizing level is at Q=3000 square yards. ...

... should produce in (a). What is Billy's profit maximizing condition in this case? Find the quantity and price that Billy will choose to maximize his profits. ...