The table below presents information about price, output and costs of a single firm in the aluminum market. Use the information below and fill-in columns for TR, MR, MC, (4 points)

 

P QD TC TR MR MC

400 0 140 0 0 0

350 1 220 350

300 2 320 600

250 3 440 750

200 4 580 800

150 5 740 750

100 6 940 600

1. Is the firm operating in the short-run or long-run? Explain how do you know?
2. What output level should the monopolist produce to maximize profit? Explain why
3. What is the profit maximizing price for this monopolist?
4. d. Is the monopolist from above making profit or suffering loss at the output it produces? Explain how do you know, do not calculate the profit or loss.
5. f. Calculate the monopolist profit or loss at the profit maximizing/ loss minimizing level of output. Show your work.
6. g. Should the monopolist from the above expect entry of new firms in the long-run?

Answer rating: 100% (QA)

To solve this problem lets start by completing the missing columns for TR Total Revenue MR Marginal Revenue and MC Marginal Cost We can then use this ... View the full answer