Purchase Solution

Determining optimal output level for a monopolist

Not what you're looking for?

Ask Custom Question

Please refer attached file for diagram.

A hypothetical monopoly firm is characterized by the following diagram.

a. Assuming that the above firm is a profit maximizer operating in the short run, determine its optimal price?
b. Determine the firm's profit
c. What is the ATC?

Attachments
Purchase this Solution
Solution Summary

Solution describes the steps for determining optimal output level, price and corresponding profit for a monopolist.

Solution Preview

Please refer attached file for diagram.

Solution

a. Assuming that the above firm is a profit maximizer operating in the short run, determine ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
  • "Thank you"
  • "Really great step by step solution"
  • "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
  • "Thanks Again! This is totally a great service!"
  • "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Multiplying Complex Numbers

This is a short quiz to check your understanding of multiplication of complex numbers in rectangular form.

Graphs and Functions

This quiz helps you easily identify a function and test your understanding of ranges, domains , function inverses and transformations.

Exponential Expressions

In this quiz, you will have a chance to practice basic terminology of exponential expressions and how to evaluate them.

Probability Quiz

Some questions on probability

Geometry - Real Life Application Problems

Understanding of how geometry applies to in real-world contexts

View More Free Quizzes
Related BrainMass Solutions

  • Determining Optimal Output Level - Problem

    250611 Determining Optimal Output Level Please refer attached file for graph. A hypothetical monopoly firm is characterized by the following diagram. a.

  • Determining Optimal Output level

    249732 Determining Optimal Output Level Please refer attached file for graph.

  • Finding optimal output level

    A vertical line from output level of 100 intersects demand curve at a point where price is $10 per unit. We can conclude that a monopolist will produce 100 units and his output will be sold at a price of $10 per unit.

  • Discounts :Monopoly Vs Competition

    Monopolist can increase its output level as long as MR is less than its MC. Optimal level is achieved when MR=MC. Of course, nobody would produce in the range where MR is less than MC.

  • Calculating profit maximizing output level and price

    a) As a monopolist, calculate this firm's optimal output (Q) and price per unit (P).

  • Moving towards optimal parameters

    468941 Determine the optimal parameters. A monopolist currently charges $50.00 per unit for the 100,000 units of product it produces and sells each month.

  • Finding optimal number of output

    422202 Find the optimal level of output. Please see the attached file for graphs. 1) Figure 6.2 shows the cost structure of a firm in a perfectly competitive market.

  • Finding optimal output level

    So, a monopolist will not produce 4th unit. Optimal output level should be 3 units. Maximum profit at this level is $250. Solution describes the steps to find optimal output level and associated profit.

  • Calculating optmal output and other related parameters

    331750 Optimal output Assume a monopolist with the following: Qd =100-10p TC = 1 + 2Q Find the following: a) Price at profit maximizing output b) Profit maximizing output c) Total Revenue at profit maximizing output d) Total Cost at profit

View More Related Solutions