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Economics
QID: #1974
Subject: Economics
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The Marginal Revenue Curve: What
is the monopoly’s profit-maximizing output level?
The marginal revenue curve of a
monopoly crosses its marginal cost curve at $30 per unit, and an output of 2
million units The price that consumers are willing and able to pay for this
output is $40 per unit If it produces this output, the firm’s average total
cost is $43 per unit, and its average fixed cost is $8 per unit
a) What is this producer’s
profit-maximizing (loss-minimizing) output level?
b) What are the firm’s economic
profits (or economic losses)?
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