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Finding optimal output level

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Answer the next question on the basis of the following information for a firm operating in an imperfectly competitive market:

Output------------Price------------Total Cost


How many units would the above profit-maximizing monopolist produce? Explain

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Please refer attached file for better clarity of table.


Output Q Price, P Total Revenue Total Cost Marginal Revenue Marginal Cost Profit
0 500 0 250 -250
1 300 ...

Solution Summary

Solution describes the steps to find optimal output level and associated profit.

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Finding optimal output level

Please refer attached file for graph.

Answer the following questions on the basis of the monopolist's situation illustrated in the following graph.

a.At what output rate and price does the monopolist operate?
b.In equilibrium, approximately what is the firm's total cost and total revenue?
c.What is the firm's economic profit or loss in equilibrium?

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