Question

​Currently, a​ monopolist's profit-maximizing output is 200 units per week. It sells its output at a price of ​$65 per unit and collects ​$35 per unit in revenues from the sale of the last unit produced each week. The​ firm's total costs each week are $95,000 per week. A. What are the firm's weekly economic profits?

B. What is the firm's marginal cost?
C. What is the firm's average total cost?

Answer 1

Maximizing profit production is provided at 200 units and $50 per unit is priced. The average expense of this is $6,000 a week.

A) The generated revenue is equal to $10,000 (200* 50). The entire sum is contributed at $6,000. The weekly economic benefit, therefore, is $4,000 (10,000-6,000)

B) The organization maximizes income at $35, i.e. MR= MC. The marginal cost, then, is $35.

C) The company's overall total cost is:

Average Total Cost = Total Cost / Units of Output

= 6,000 / 200

= 30

Hence, the ATC is $30

Answer 2

A) - $82,000 (Loss)

B) $35

C) $475

Step-by-step explanation:

Total Cost per week = $95,000

Total weekly Output = 200 unit

Price per Unit = $65

Revenue per Unit = $35

A) What are the firm's weekly economic profits?

Weekly economic profit = Revenues per week - total cost per week

Revenue per week = Total Output x Price per Unit = 200 units x $ 65 = $13,000

Weekly economic profit = $13,000 - $ 9500 0

Weekly economic profit = - $82,000 (Loss)

B) What is the firm's marginal cost?

The firms marginal cost is $35. marginal revenue equals marginal cost.

C) Firm's average total cost = $ 95000 / 200

Firm's average total cost = $475