00:01
So here we're talking about firm's decisions, right? and this firm has a decision to make between price and quantity, right? it can choose whatever price and quantity it wants because it's a monopolist, right? and it looks like the price should be 18, 16, 14, 12, 10, 8, 6, 4, 2.
00:22
And let's say 0 just for completeness.
00:24
Again, it says 6, but that 6 should really be a 16, right? the one got left off quantity 0 4 8 12 16 20 24 28 32 and 36 now revenue is equal to price times quantity right so to calculate revenue which is the first step we need to do here we need to multiply so revenue here is 0 64 and now i'm going to say if we start from the bottom i can also squeeze a zero and a 64 in here.
01:01
You see how these things are symmetric in a way, right? this is going to be 108 right there.
01:10
Six times 24 is going to be 144.
01:14
Eight times 20 is 160.
01:16
This is also 160.
01:17
This is 144.
01:20
And eight times 14 would be 80 times 32, which is 112.
01:26
Right? so here is our, oh, no wonder, i am making a small mistake here.
01:34
This is, of course, 112 as well.
01:37
Miakoba, 112.
01:40
So now marginal revenue is equal to the change in revenue.
01:44
So this one doesn't really make any sense because there is no previous unit.
01:48
But here you can think we're going plus 64, right? so here we have 64.
01:54
As we go up to here, we get 36 plus 12, which is 48.
01:58
As we go up one more, we get 32, we get 16, we get zero, we get 16, sorry, minus 16.
02:08
Now because we're going down, we get minus 32, minus 48, and minus 64.
02:14
There's my marginal revenue schedule, which is part a.
02:21
Now for b, for profit maximizing, what the firm wants to do is to set marginal revenue equal to marginal cost...
