Consider the following information about bikes, where Q is output, TC is the total cost of production, and p is the price.
Q TC MC P TR MR Profits
0 2000 - 600
1 2500 575
2 2800 550
3 3000 525
4 3160 500
5 3340 475
6 3540 450
7 3780 425
8 4080 400
9 4410 375
10 4770 350
11 5190 325
12 5760 300
a) Fill in the remaining columns in the chart.
b) Where is the marginal revenue curve relative to the firm's demand curve?
c) Determine the profit maximizing price and quantity. At this price and quantity, calculate this monopoly's economic profits.
d) Given this firm's level of economic profits, where must the firm's average total cost curve (ATC) and average variable cost curve (AVC) lie?
e) List the causes of monopoly.
f) What characteristics do monopolies and perfectly competitive firms have in common?