The following figure shows the demand curve and the marginal revenue (MR)curve of a monopolist supplying petroleum.

a)If the monopolist faces a constant marginal cost of $3,what is the optimal output that it should produce?
b)If the monopolist faces a constant marginal cost of $3,at what price should it sell the optimal output?
c)If the average total cost of the monopolist is $4 per gallon when it produces the optimal output,determine its profit or loss.

Question

The following figure shows the demand curve and the marginal revenue (MR)curve of a monopolist supplying petroleum.
  
a)If the monopolist faces a constant marginal cost of $3,what is the optimal output that it should produce?
b)If the monopolist faces a constant marginal cost of $3,at what price should it sell the optimal output?
c)If the average total cost of the monopolist is $4 per gallon when it produces the optimal output,determine its profit or loss.

Quizplus · Accepted Answer

The Answer of The following figure shows the demand curve and the marginal revenue (MR)curve of a monopolist supplying petroleum.
  
a)If the monopolist faces a constant marginal cost of $3,what is the optimal output that it should produce?
b)If the monopolist faces a constant marginal cost of $3,at what price should it sell the optimal output?
c)If the average total cost of the monopolist is $4 per gallon when it produces the optimal output,determine its profit or loss.

The Following Figure Shows the Demand Curve and the Marginal