Use the table to work Problems 3 to 5.

Minnie's Mineral Springs is a single-price monopoly.Columns 1 and 2 of the table set out the market demand schedule for Minnie's water and columns 2 and 3 set out Minnie's total cost schedule.

1.Calculate Minnie's marginal revenue schedule and draw a graph of the market demand curve and Minnie's marginal revenue curve. Explain why Minnie's marginal revenue is less than the price.

Price

(dollars per bottle)

Quantity demanded

(bottles per hour)

Total revenue

(dollars)

Marginal revenue

(dollars per bottle)

10

0

0

8

8

1

8

4

6

2

12

0

4

3

12

4

2

4

8

8

0

5

0

.

2.At what price is Minnie's total revenue maximized and over what range of prices is the demand for water elastic? Why will Minnie not produce a quantity at which the market demand is inelastic?

3.Calculate Minnie's profit-maximizing output and price and economic profit.