A monopolist with a straight-line demand curve finds that it can sell 2 units at $12 each
Question:
A monopolist with a straight-line demand curve finds that it can sell 2 units at $12 each or 12 units at $2 each. Its fixed cost is $20 and its marginal cost is constant at
$3 per unit.
a. Draw the MC, ATC, MR, and demand curves for this monopolist.
b. At what output level would the monopolist produce?
c. At what output level would a perfectly competitive firm produce?
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