Question 1 1 point Suppose a monopolist faces the demand cur

Question 1 (1 point) Suppose a monopolist faces the demand curve described in the table below. The monopolist cannot price discriminate and must charge the same price for each unit sold.

Solution

1.  

At price of $ 8, MR = $ 4

2. At price of $ 6, MR = $ 0

3. When MC is fixed at $ 4, then firm will sold output where MR = MC = 4 i.e. 3 units.

4. 40 units will be sold because equilibrium quantity is where MR = MC i.e. 40.

Quantity	Price	TR = P x Q	Marginal Revenue
0	14	0	-
1	12	12	12 - 0 = 12
2	10	20	20 - 12 = 8
3	8	24	24 - 20 = 4
4	6	24	24 - 24 = 0
5	4	20	20 - 24 = - 4