00:02
Hello, let me draw this graph first.
00:08
So here we have the marginal cost curve.
00:14
Also we have marginal revenue and demand curves.
00:25
This one is marginal revenue, this one is demand.
00:31
And now you ask me to place point e as the monopolies profit maximizing price and quantity.
00:38
Let me use the red color.
00:40
So here the...
00:45
Oh let me use the blue because the red color will be for atc curve so the quantity will be this one intersection of marginal revenue and marginal cost and here we have the point e this will be the optimal price and quantity here we have point e the quantity at which marginal cost intersect the marginal revenue curve.
01:23
Now we need to move the average total cost to a position that depicts the monopoly earning a positive profit.
01:37
So here we have the situation at which...
01:52
So here we have something like this.
01:59
The average total cost curve should intersect the marginal cost curve.
02:29
It will be something like this.
02:30
Let's say this will be the point of intersection.
02:34
And we have something like this.
02:37
Slightly decrease here and then it starts to increase.
02:45
So this red curve is the average cost or average total cost curve...