The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. a. Place point P1 at the profit maximizing price and quantity assuming that the monopolist can only charge a single price. b. What are the profits of the firm if it charges a single price? $ 1225 Suppose the monopolist able to successfully price discriminate between two groups by charging one group $75 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above? Price and Costs($) 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 $ 1625 D MR D MC 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity
The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. a. Place point P1 at the profit maximizing price and quantity assuming that the monopolist can only charge a single price. b. What are the profits of the firm if it charges a single price? $ 1225 Suppose the monopolist able to successfully price discriminate between two groups by charging one group $75 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above? Price and Costs($) 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 $ 1625 D MR D MC 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.1P
Related questions
Question
Transcribed Image Text:The accompanying graph depicts the marginal revenue
(MR), demand (D), and marginal cost (MC) curves for a
monopoly.
a. Place point P1 at the profit maximizing price and quantity
assuming that the monopolist can only charge a single price.
b. What are the profits of the firm if it charges a single price?
$ 1225
Suppose the monopolist able to successfully price
discriminate between two groups by charging one group $75
and charging $35 to the other group.
c. What are the firm's profits if it charges the two prices as
mentioned above?
Price and Costs($)
100
95
90
85
80
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
$
1625
D
MR
D
MC
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100
Quantity
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
