Below are two different cases. In each case, the monopolist wants to maximize its profits or minimize its losses. Analyze each case and give a recommendation as to what the monopolist should do based on the possible recommendations provided below. Explain how you reached this recommendation and the reasons for it.
Possible Recommendations:
a. Increase production and reduce the price.
b. Decrease production and raise the price.
c. Shut down.
d. The monopoly is currently at the correct position.
CASE ONE:
Price=3
Quantity of Output=1500
Total Cost=4500
Average Cost= (must find)
Marginal Revenue=2
Total Revenue= (must find)
Fixed Costs= (must find)
Marginal Cost=3
Answers: 3
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Below are two different cases. In each case, the monopolist wants to maximize its profits or minimiz...
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