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Economics

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Same as before. You may work in groups but the answers need to be in your words. You may still get a high score on this problem set even if every answer is not exactly correct as long as you are close and show that you really tried. 

And, please reach out for help. Come to Zoom office hours or email me any time. My goal is to work with you on these. 

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• Monopoly Problem Set

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  Monopoly Problem Set^[1]

   

   

   

  Use the following information to answer questions 1 through 4:

  The table below shows data for the production of Apples for an individual firm operating as a monopoly.

  Quantity of Apples	Price	Total Costs
  0	600	3000
  10	550	3750
  20	500	4750
  30	450	6000
  40	400	8500
  50	350	12500

   

   

   

  1. Given this data, complete the table:

  Quantity of Apples	Total Revenue (TR)	Profit	Marginal Revenue (MR)	Marginal Costs (MC)
  0			-	-
  10
  20
  30
  40
  50

   

   

   

   

  2. At what quantity are marginal revenues equal to marginal costs?

  3. What is the profit maximizing quantity?

  NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities!

   

   

   

  4. What is the profit maximizing price?

  NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities!

   

   

   

   

  Use the following information to answer questions 5 through 9:

   

  The graph below shows the demand curve and cost data for a firm operating as a monopolist.

   

  

   

  5. Curve 1 shows:

• Demand Curve
• Marginal Costs
• Marginal Revenue

•  

   

   

  6. Curve 2 shows:

• Demand Curve
• Marginal Costs
• Marginal Revenue

•  

   

   

  7. Curve 3 shows:

• Demand Curve
• Marginal Costs
• Marginal Revenue

•  

   

  8.  The profit maximizing quantity for this monopolist is:

• 8.25
• 6.25
• 7.89
• 9.89

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  9. What price will the monopolist set in order to maximize profits (or minimize losses)?

• 13.88
• 11.88
• 11.05
• 13.05

•  

   

   

   

  10. The graph below shows demand curve and cost data for a firm operating as a monopolist. In addition, Curve 4 shows average total costs (ATC).

   

  

   

   

  At the profit maximizing (loss minimizing) quantity, the monopolist is experiencing

• Losses
• Break-even point
• Profits

•  

   

   

  Use the following information to answer questions 11 through 14:

  The graph below shows demand curve and cost data for a firm operating as a monopolist. In addition, Curve 4 shows average total costs (ATC).

   

  

   

  11. Suppose that the government decided to regulate this monopolist by requiring the firm to produce at the point where the Marginal Cost curve intersects with the demand curve. What is the quantity under this marginal cost pricing?

• 4.84
• 6.84
• 2.84

•  

  12. Suppose that the government decided to regulate this monopolist by requiring the firm to produce at the point where the Marginal Cost curve intersects with the demand curve. What is the price under this marginal cost pricing?

• 12.58
• 14.58
• 10.58

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  13. Compared to the profit maximizing quantity for this monopolist, the marginal cost pricing quantity is

   

• Bigger
• The same
• Smaller

•  

  14. Compared to the profit maximizing price for this monopolist, the marginal cost pricing price is

   

• Higher
• The same
• Lower
•  

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  ^[1] This assignment by Lumen Learning is licensed under a Creative Commons Attribution 4.0 International License. You can access an alternative means to plotting points at https://www.desmos.com/calculator.