The following table shows the demand for a product produced by a monopolist, who has a...

 

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The following table shows the demand for a product produced by a monopolist, who has a constant marginal cost and an average total cost of $45 per unit. Quantity (thousands of units) 0 1 2 3 4 5 6 Price (dollars per unit) 120 105 90 75 60 45 30 a. Calculate total revenue and marginal revenue for level of quantity. b. What are the profit-maximizing output level and price level? In no more than three sentences, explain why. c. Calculate the monopolist's profit. d. Calculate the Lerner Index for this industry. The following table shows the demand for a product produced by a monopolist, who has a constant marginal cost and an average total cost of $45 per unit. Quantity (thousands of units) 0 1 2 3 4 5 6 Price (dollars per unit) 120 105 90 75 60 45 30 a. Calculate total revenue and marginal revenue for level of quantity. b. What are the profit-maximizing output level and price level? In no more than three sentences, explain why. c. Calculate the monopolist's profit. d. Calculate the Lerner Index for this industry.

Answer rating: 100% (QA)

a To calculate total revenue we multiply the quantity by the price for each level of quantity Quanti... View the full answer