MONOPOLOST ACTIVITIES IN MAXIMIZING PROFITS

(How they arrived & imposed price on the product)

COMPUTATION WHEN COST OF PRODUCTION IS FIXED

Price Per
Quantity

Quantity Sold

6.00
5.60
4.70
4.20
3.50
2.60

500
610
725
850
1,280
1,350

Total
Receipts

Cost Per
Quantity
2.30
2.30
2.30
2.30
2.30
2.30

Total Cost

Monopoly
Profits

MONOPOLOST ACTIVITIES IN MAXIMIZING PROFITS

(INCREASING COST)

COMPUTATION WHEN COST OF PRODUCTION IS FIXED

Price Per
Quantity

Quantity Sold

6.00
5.60
4.70
4.20
3.50
2.60

500
610
725
850
1,280
1,350

Total
Receipts
3,000.00
3,416.00
3,407.50
3,570.00
4,480.00
3,510.00

Cost Per
Quantity
2.30
2.45
2.60
3.10
3.50
3.65

Total Cost

1,150.00
1,494.50
1,885.00
2,635.00
4,480.00
4,927.50

FITS

IS FIXED
Monopoly
Profits
1,850.00
1,921.50
1,522.50
935.00
0.00
(1,417.50)

MONOPOLOST ACTIVITIES IN MAXIMIZING PROFITS

(DECREASING COST)

COMPUTATION WHEN COST OF PRODUCTION IS FIXED

Price Per
Quantity

Quantity Sold

6.00
5.60
4.70
4.20
3.50
2.60

500
610
725
850
1,280
1,350

Total
Receipts
3,000.00
3,416.00
3,407.50
3,570.00
4,480.00
3,510.00

Cost Per
Quantity
2.30
2.15
1.85
1.75
1.10
1.00

Total Cost

1,150.00
1,311.50
1,341.25
1,487.50
1,408.00
1,350.00

Monopoly
Profits
1,850.00
2,104.50
2,066.25
2,082.50
3,072.00
2,160.00