Which point does the monopolist use to decide how much to produce?
Figure 9.9
A
B
C
D
E
35.
Which point does the monopolist use to choose what price to charge for the profit-maximizing output?
Figure 9.10
A
B
C
D
E
36.
Use the information in the table below to answer the following.
Quantity
Price
Total Revenue
Marginal Revenue
Total Cost
Marginal Cost
1
$12
$2
2
$11
$3
3
$10
$5
4
$9
$11
5
$8
$19
Table 9.5
List an example of a legal barrier to entry and describe how a firm might use a barrier to entry to keep other firms out of the market.
What is the profit-maximizing output of this monopolist, and how much does it charge for its output?
Calculate the profits earned for this firm at the equilibrium point.
If this firm were operating in a perfectly competitive market instead of a monopoly, would it produce more or less than it is now? Would it charge a higher or lower price than it is now? Explain.
