Assignment covers Chapter 9 Material
1.
Complete the following cost and revenue schedule
| Average | ||||||
| Quantity | Total | Marginal | Total | Marginal | Total | |
| Price | Demanded | Revenue | Revenue | Cost | Cost | Cost |
| $20 | 0 | $80 | ||||
| $18 | 10 | $140 | ||||
| $16 | 20 | $220 | ||||
| $14 | 30 | $320 | ||||
| $12 | 40 | $440 | ||||
| $10 | 50 | $580 | ||||
| $8 | 60 | $740 | ||||
| $6 | 70 | $920 | ||||
| $4 | 80 | $1,120 | ||||
| $2 | 90 | $1,470 |
a.
Graph the
demand, MR, and MC curves.
b.
At what rate
of output are profits maximized within this range?
c.
What are the
values of MR and MC at the profit-maximizing rate of output?
d.
What are
total profits at that output rate?
e.
If a
competitive industry confronted the same demand and costs, how much output would
it produce in the short run?
f. What would happen to long-run price in perfect competition?
2.
Another monopoly problem.
a. Complete the following table
| Price: | $15 | $13 | $11 | $9 | $7 | $5 | $3 | $1 |
| Quantity Demanded: | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Marginal Revenue: | ____ | ____ | ____ | ____ | ____ | ____ | ____ | ____ |
| Total Cost: | $10 | $12 | $19 | $29 | $44 | $64 | $89 $119 | |
| Marginal Cost: | ____ | ____ | ____ | ____ | ____ | ____ | ____ | ____ |
b.
What is the profit-maximizing rate of output?
c.
What price should be charged at that rate of output?