Explore BrainMass
Share

Explore BrainMass

    Determining optimal output and price level.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please refer attached file for graph

    Refer to the given graph of a hypothetical monopolist and answer the following

    a. What is the firm's Total Revenue?
    b. What is the Total Cost?
    c. What is the firm's Total Profits?
    d. If the above monopolist were to behave like a perfectly competitive firm (operating in the long run), determine its output.

    © BrainMass Inc. brainmass.com October 10, 2019, 12:12 am ad1c9bdddf
    https://brainmass.com/economics/price-levels/determining-optimal-output-and-price-level-283014

    Attachments

    Solution Preview

    Please refer attached file for graph

    Solution:

    a.What is the firm's Total Revenue?
    A monopolist sets its output such that MR=MC to maximize its profits.
    MC and MR intersect each other at Point G. Price can be determined from demand curve. A vertical ...

    Solution Summary

    Solution depicts the methodology to find profit maximizing total costs, total revenue and total profits for a monopolist. It also determines the optimal output level for perfectly competitive firm in the long run.

    $2.19