5. In this question, you are asked to plot the demand facing a monopolist as well as its marginal revenue. You are also asked to plot the marginal cost. I encourage you to make use of Excel or a similar software to do the drawings. The vector below provides the output quantity (O) per hour, per line: 2 3 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 The function below provides the demand function (per hour, per line) in its inverse form: P = 8 - (0.2 x Q) Also, the function below provides the marginal cost of production (per hour, per line): MC = 3 + (0.25 x Q) a. Use Excel (or a similar software) to plot the demand function in a system where price () is on the vertical axis and quantity (O) is on the horizontal axis b. Add the marginal revenue plot to the plot generated in part a. c. Add the marginal cost plot to the plots generated in parts a and b. Make sure that you copy and paste the plots in parts a, b, and c below. d. Considering the generated plot, what is the profit-maximizing output (per hour, per line)? e. Considering the generated plot, what is the profit-maximizing price? |