Jim Whitney Economics 250
Monopoly worksheet

    1. Complete the following table:

P Q TR MR TC MC Profits
12 0   --- 5 ---  
10 1     6    
8 2     7    
6 3     9    
4 4     12    
2 5     16    
0 6     22    
    2. Provide the following information about the firm's profit-maximizing output (Q*):
     Q* = ______   MR = ______   MC = ______
    P  = ______   TR = ______   TC = ______   Profits = ______
 

The math and geometry of profit maximization:

    3. Given:
            P = 20 - .5Q
            TC = 80 + 4Q

    a. What is the equation for your marginal revenue (MR)?

    b. What is the equation for your marginal cost (MC)?

    c. Find the firm's profit-maximizing output level (Q*), and calculate each of the following:
     Q* = ______   MR = ______   MC = ______
    P  = ______   TR = ______   TC = ______   Profits = ______

    d. What is the equation for your ATC?

    e. Complete the following table of ATC values:

Q ATC
8 14
16  
24  
32  
    f. In the diagram to the right, plot each of the following for this monopoly: (1) Demand, (2) MR, (3) MC, and (4) ATC.

    g. Shade in the firm's profits at its profit-maximizing output level.