Quantity, price, total revenue, and total cost for a monopoly firm that produces cement are listed in the table below

Economics May 08, 2021

Quantity, price, total revenue, and total cost for a monopoly firm that produces cement are listed in the table below.
Quantity, (Q) (tons) Price (P) Total Revenue (TR) Total Cost (TC) 1 $1,400 $1,400 $900 2 $1,315 $2,630 $980 3 $1,230 $3,690 $1,100 4 $1,145 $4,580 $1,270 5 $1,060 $5,300 $1,510 6 $975 $5,850 $1,810 7 $890 $6,230 102,190
Determine the firm's profit-maximizing price. Write the exact answer. Do not round.

Expert Solution

Computation of Firm's Profit Maximizing price:

Quantity ( Q)	Price	Total Revenue	Total Cost ( TC)	Marginal Revenue ( MR)	Marginal Cost ( MC)	Profit /Loss
(tons)	( P)	( TR)	Total Cost ( TC)	Marginal Revenue ( MR)	Marginal Cost ( MC)	Profit /Loss
1	1400	1400	900	-	-	500
2	1315	2630	980	1230	80	1650
3	1230	3690	1100	1060	120	2590
4	1145	4580	1270	890	170	3310
5	1060	5300	1510	720	240	3790
6	975	5850	1810	550	300	4040
7	890	6230	2190	380	380	4040

So the profit maximising price will be $890 because at this point MR = MC = $380

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