The demand and cost schedules for Petes Gold, a monopoly, are shown in the tables below.
|
Price
|
Quantity demanded
|
|
100
|
100
|
|
200
|
80
|
|
300
|
60
|
|
400
|
40
|
|
500
|
20
|
|
600
|
0
|
|
Quantity produced
|
Total cost
|
|
0
|
6,000
|
|
20
|
7,200
|
|
40
|
8,800
|
|
60
|
10,800
|
|
80
|
13,200
|
|
100
|
16,000
|
1 Calculate Pete's marginal revenue schedule. Draw the demand curve and the marginal revenue curve.
2 Calculate Pete's marginal and average cost schedules.
3 What are Pete's profit-maximizing output and price? What is Pete's economic profit? Explain your answer.