BAD 200 Lecture Notes - Lecture 6: Demand Curve
18 Dec 2020
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By charging $ 2. 25, loss of firm decreases but firm is not able to earn profit. 4. 00t 3. 50 monopoly outcome 3. 00loss oss 2. 50 profit tc 2. 00 loss 1. 50 1. 00 mc 0. 50 mr 0 0. 5 0 . 5 2. 0 25 3. 0 3. 5 4. 0 quantity (thousands of cans of beer) 4. 00 t 3. 50 3. 00 5 2. 50 2. 00 profit 1. 50 atc 1. 00 0. 50 t mc mr 0 0. 5 . 0 15 2. 0 25 3. 0 3. 5 4. 0 quantity (thousands of cans of beer) The equilibrium quantity for a monopolist is at point where marginal revenue curve intersects marginal cost curve. Equilibrium price is where the equilibrium quantity line intersects demand curve. The equilibrium price and quantity is shown in figure as follows 4. 00 3. 50 loss monopoly. At the price of s2, quantity demanded is 1000: price 1000 quantity total revenue (s2x1000) total cost (s2. 75x1000) - (loss) (-) profit.
