MG 640 HW 9 Nov 4, 2015

Question 6 on Pages 316

The accompanying diagram shows the demand, marginal revenue,
and marginal cost of a monopolist

a.
Determine the profit-maximizing output and price.
Explain. Just don’t state the answer

b.
What price and output would prevail if this
firm’s product were sold by price-taking in a perfectly competitive market? Explain. Just don’t state the answer

c.
What conclusion can draw between a firm
operating as a competitor and monopolist
in terms of

i)
Output produced

ii)
Price charge

Price($) 120		.0/msohtmlclip1/01/clip_image001.png”>					MC
110	.0/msohtmlclip1/01/clip_image002.png”>.0/msohtmlclip1/01/clip_image003.png”>
100
90
80
70
60
50
40
30
20
10										D
0						MR
	0	1	2	3	4	5	6	7	8	9	10 Quantity

Question 7

The supply curve of a single firm under perfect competition
is that portion of the MC curve above the minimum point of the AVC curve. How
about the supply curve of the monopolist? Does the monopolist have a supply
curve? Discuss