a. Calculate TR at each point along the demand curve,
through H.
b. Suppose the firm reduces the price from $160 to $140.
Calculate the revenue it will give up on the units it was
already selling. Calculate the revenue it will gain on the
new units it will sell. What is the firm’s marginal revenue
by moving from point A to point B?
c. Calculate the marginal revenue for each increment of 10
additional units the firm sells, from B to C, C to D, and so
on. Plot the MR curve on the diagram.
d. Explain in words why the MR curve facing a single-price
monopolist is different than the MR curve facing a
perfectly competitive firm.
12. The diagram below shows the demand curve, marginal revenue
curve, and cost curves for a monopolist that owns the only golf
course on Eagle Island. The monopolist’s product is 18-hole golf
games.
sean pound
(Sean Pound)
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