Econ question
2007-08-01 12:22 pm
You are asked to advise a monopolist manager who is producing 5,000 units with total revenues of $25,000. The marginal cost equals ATC, total fixed costs are $10,000, average variable cost is $4.00 and marginal revenus is $2.50. Is the firm making a profit or loss? What, if anything, should this monopolist do with output and price to maximize profits?
回答 (1)
2007-08-01 12:32 pm
✔ 最佳答案
MC = ATCTFC = 10000
AFC = 10000/5000=2
AVC = 4
ATC= AFC + AVC = 2+4 =6 = MC
MR = 2.5
To maximize profit: MR= MC
loss
increase output until 20000 units or increase price
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