# Determining profit maximzing price and output level

Use the following data for a pure monopoly to calculate the firm's:

(a) total revenue, marginal revenue, marginal costs, and average total cost;

(b) its profit-maximizing output level and produce price;

(c) its profit.

(d) Use the price-cost formula to determine whether or not the firm's operations are productively-efficient.

(e) Use the price-cost formula to determine whether or not the firm's operations are allocatively efficient.

Q (P = AR) TR MR TC MC ATC

0 $0 $60

1 58 100

2 57 136

3 56 168

4 55 200

5 54 235

6 53 276

7 52 322

8 51 376

C1~Q C2~PRICE C3~Total Cost

C=column

https://brainmass.com/economics/pricing-output-decisions/determining-profit-maximzing-price-and-output-level-239133

#### Solution Preview

Please refer attached file for better clarity of tables and formulas.

Solution:

a)

Q P=AR TR MR TC MC ATC Profit TR-TC

0 0 0 60 -60

1 58 58 58 100 40 100 -42

2 57 114 56 136 36 68 -22

3 ...

#### Solution Summary

Solution describes the steps for determining profit maximizing output and price level for a pure monopoly firm. It also determines whether firm's operations are productively and allocatively efficient.