question archive In the follow situation for a monopoly firm in the short run, what is the profit maximizing level of output
In the follow situation for a monopoly firm in the short run, what is the profit maximizing level of output
Subject:EconomicsPrice:2.86 Bought5
In the follow situation for a monopoly firm in the short run, what is the profit maximizing level of output. Please show your work and be as precise as possible.
Q P FC MC______________________________________
0 $4
$1
1 $15
$2
2 $12.
$3
3 $9
$4
4 $6
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Monopolist's profit maximizing level of output is 3
Q=3
Step-by-step explanation
We shall compute the Total revenue and Marginal revenue table as well to clarify.
Total Revenue = Price x output
Marginal Revenue = TR2-TR1 (Increment in total revenue due to one extra unit production)
Monopolist will produce at MR=MC level.
Here we can observe that the MR=MC =3 level is output = 3
Please see the attached file for the complete solution
