Single-Price Monopolist. Can I get some help starting at question 13? Thank you!
ID: 2441328 • Letter: S
Question
Single-Price Monopolist. Can I get some help starting at question 13? Thank you!
f) What is Dawn's average total cost (ATC) and marginal cost (MC)? g) What is the profit of Dawn's? h) If all of the other donut stores in this perfectly competitive market in DC have identical cost curves and behave exactly like Dawn's Donuts, how many donut stores will there be in long-run equilibrium? Chapter 13: 1. Consider the following picture of a single-price monopolist's cost curves: MC 12 ATC 10 MR 22242 Units of outputExplanation / Answer
13. 1. a ) Ans: 11
13. 1. b ) Ans: 22 units
Explanation :
Profit maximization condition for monoploist is where , MC = MR
13. 1. c ) Ans: 88
Explanation :
Total profit = Total revenue - Total cost
= { (Price * Quantity) - (ATC * Quantity) }
= { 11 * 22 ) - ( 7 * 22 )
= 242 - 154
= 88
13.2. a ) Ans:
Note :
Total Revenue = Price per unit * Total quantity demanded
Marginal Revenue = Change in total revenue / change in Quantity
Price Quantity Demanded Total Revenue Marginal Revenue 12 0 0 0 11 1 11 11 10 2 20 9 9 3 27 7 8 4 32 5 7 5 35 3 6 6 36 1 5 7 35 -1