3. use the chart to complete the following:
2 explain why the mr curve less than the demand curve for all imperfectly competitive firms. use a
specific numerical example from the chart in your explanation ( 75)
on a large graph. plot the demand and marginal revenue curves. on a new graph below, plot the
total revenue. use the total revenue test to explain the elastic and inelastic range of the demand
curve. be sure to identify the elastic and inelastic ranges. < /5)
c. use the chart to identify the following: c /5)
a. the profit maximizing price and quantity.
b. the atc at the profit maximizing quantity.
c. the profit per unit at the profit maximizing quantity.
socially optimal (allocatively efficient) price and quantity
e. the amount the government would need to subsidize per unit to get the monopoly to
produce the allocatively efficient output.
profit
price
quantity
demanded
0
total
revenue
marginal
revenue
marginal
cost
$110
100
90
80
3
total
cost
$100
140
160
170
200
240
290
350
420
520
70
60
50
40
30
20