Monopoly Profit Maximizing Analysis

PART 2
Total
Output
Units
0
1
2
3
4
5
6
7
8
9
10
11
12

Average
Price Per
Total
Total
Marginal
Unit
Revenue
Total
Total
Costs
Marginal Revenue
(Demand)
(TR)
Costs (TC) Profit (TP) (ATC) Cost (MC)
(MR)
$8.00
0.00
10.00
-10.00
-$7.80
7.80
14.00
-6.20
14.00
4.00
7.80
$7.60
15.20
17.50
-2.30
8.75
3.50
7.40
$7.40
22.20
20.75
1.45
6.92
3.25
7.00
$7.20
28.80
23.80
5.00
5.95
3.05
6.60
$7.00
35.00
26.70
8.30
5.34
2.90
6.20
$6.80
40.80
29.50
11.30
4.92
2.80
5.80
$6.60
46.20
32.25
13.95
4.61
2.75
5.40
$6.40
51.20
35.10
16.10
4.39
2.85
5.00
$6.20
55.80
38.30
17.50
4.26
3.20
4.60
$6.00
60.00
42.70
17.30
4.27
4.40
4.20
$5.80
63.80
48.70
15.10
4.43
6.00
3.80
$5.60
67.20
57.70
9.50
4.81
9.00
3.40
Profitability Analysis:
1.) The reason why MC=MR for the monopoly is because the marginal cost is
still below where MC=MR.
2.) The determine price by how much in demand a product is. For example,
you never see Apple advertising deals on their new products. Why? It's
because the consumer will buy it whether there is a discount or not. The
monopolists are not affected.
3.) The reason why monopolies are considered as an inefficient use of
resources is because....
- They dont have any competition and therefore they become complacent in
coming up with new ideas and resources arent used properly. The produce less
and set higher prices.
- They use too few resources therefore arent very beneficial to society.

- They use too few resources therefore arent very beneficial to society.