Answer the following Questions for a Monopoly Firm. Price Quantity TR MR MC TC Profit $15,000 0
Question:
Answer the following Questions for a Monopoly Firm.
Price | Quantity | TR | MR | MC | TC | Profit |
$15,000 | 0 | ---- | ---- | $50,000 | ||
14,000 | 1 | $52,000 | ||||
13,000 | 2 | $53,000 | ||||
12,000 | 3 | 54,000 | ||||
11,000 | 4 | $2,000 | ||||
10,000 | 5 | 59,000 | ||||
9,000 | 6 | 4,000 | ||||
8,000 | 7 | $69,000 | ||||
7,000 | 8 | $8,000 | ||||
6,000 | 9 | |||||
5,000 | 10 | |||||
4,000 | 11 | $18,000 | ||||
3,000 | 12 | $143,000 |
a) Fill in the missing information above for this Monopoly Firm for its monthly production. Note there are no numbers for MC and MR when Q=0. Please note that the Total Variable Cost (VC) of producing 9 units of output is $37,000 and the Average Total Cost (ATC) of producing 10 units of output is $10,100.
b) At which unit of output does Diminishing Marginal Returns start? Please explain your answer.
c) If this firm produces in the Short Run, determine its profit maximizing/loss minimizing output level. Please explain your answer using MC and MR.
d) If this firm produces in the Short Run, determine its profit maximizing/loss minimizing price.
e) If this firm produces in the Short Run, state its profit maximizing/loss minimizing profit amount (from the profit column) .
f) If this firm shuts down in the Short Run, determine its profit maximizing/loss minimizing profit amount. Please explain your answer.
g) What should this firm do in the Short Run in order to maximize its profits/minimize its loss (produce or shut down)? Please explain your answer using numbers.
h) Explain what this firm should do in the Long Run.