Econ 315 Group Assignment 3[]

Econ 315 Group Assignment 3

 

Consider a monopolist with the following demand function: Q = 60 – 0.667P

 

a.     Graph the demand and MR lines. What is the equation of the MR?

 

b.     Calculate the number of units the firm should produce? MC=10+1.3333Q, Identify this quantity on the graph.

 

c.     Calculate the price the firm should charge? Identify this price on graph

 

d.     Using cost table from previous assignment, show average total cost on graph above.

 

e.     Calculate the profit of the firm?

 

f.      If this was a perfectly competitive market, how many units would be produced and at what price?

 

g.     Calculate welfare loss due to being a monopoly. Identify this area on the graph