Purchase Solution

# Demand Curve and Total Cost Curve

Not what you're looking for?

Please study these, you will see them again.

1. Question 1 - 4 using the information presented in question 1.

A monopoly faces the following demand curve and total cost curve:
Q = 2400 -100P
TC = 150,000 + 6Q.

Find the profit maximizing level of price
a. P = \$15
b. P = \$16
c. P = \$17
d. P = 19

2. Find the profit maximizing output:
a. Q = 100 units
b. Q = 900 units
c. Q = 1000 units
d. Q = 90 units
e. cannot be derived

3. The total cost (TC) of the monopolist corresponding to the profit maximizing level of output is:

a. \$150,000
b. \$206,000
c. \$155,400
d. impossible to determine with the given information
e. \$200,000

4. The average total cost (ATC)of the firm corresponding to the profit maximizing level of output is:
a. \$166.66
b. \$132.32
c. \$160
d. \$172.66

5 . In the long run, new firms will keep entering a monopolistically competitive industry:
a. provided economies of scale are being realized.
b. even though losses are incurred in the short run.
c. until minimum average total cost is achieved.
d. until economic profits are zero.

##### Solution Summary

In the long run, new firms will keep entering a monopolistically competitive industry:
a. provided economies of scale are being realized.
b. even though losses are incurred in the short run.
c. until minimum average total cost is achieved.
d. until economic profits are zero.

##### Solution Preview

1. Questtion 1 - 4 using the information presented in question 1.
A monopoly faces the following demand curve and total cost curve:
Q = 2400 -100P
TC = 150,000 + 6Q. Find the profit maximizing level of price
a. P = \$15
b. P = \$16
c. P = \$17
d. P = 19

The demand curve can be written into
P=24 - 0.01 Q
Then total revenue is
TR = P*Q = (24 - 0.01 Q)*Q = 24Q - 0.01 Q^2
So marginal revenue is
MR = dTR / dQ = 24 - 0.02Q

From TC = 150,000 + 6Q we calculate ...

##### Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

##### Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

##### Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

##### Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

##### Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.