6. In question five is the monopolist price higher than if the market were competitive? Is price higher than MC?
7. Using The following graph and table:
A. What is the total profit of producing 4 units?
B. What is total profit of producing at level 5 units?
C. Which quantity should the monopolist choose to produce?
D. What can you say about the relationship of MR and MC at the fifth unit?
Cost Information
Total Marginal Average
Quantity Cost Cost Cost
1 1,500 — 1,500
2 1,800 300 900
3 2,200 400 733
4 2,700 500 675
5 3,300 600 660
6 4,200 900 700
7 5,400 1,200 771
8 7,200 1,800 900
Revenue Information
Total Marginal
Quantity Price Revenue Revenue
1 1,200 1,200 —
2 1,100 2,200 1,000
3 1,000 3,000 800
4 900 3,600 600
5 800 4,000 400
6 700 4,200 200
7 600 4,200 0
8 500 4,000 -200