Questions: The table below shows the marginal revenue and costs for a monopolist. Demand, Costs, and Revenues Price (dollars) Quantity Demanded Marginal Revenue (dollars) Marginal Cost (dollars) Average Total Cost (dollars) ----------------------------------------------------------------------------------------------------------------------- 146 150 146 25 139.00 138 250 126 50 103.30 130 350 110 48 87.50 122 450 94 94 89.00 114 550 78 29 78.00 106 650 62 46 73.00 Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus a. What is the monopolist's profit-maximizing level of output? units b. What is the monopolist's profit at the profit-maximizing level of output?

To determine the monopolist's profit-maximizing level of output, we need to find the quantity where marginal revenue (MR) equals marginal cost (MC). This is because a monopolist maximizes profit by producing the quantity at which MR = MC.

Let's examine the table:

\begin{tabular}{|c|c|c|c|c|} \hline \begin{tabular}{c} Price \\ (dollars) \end{tabular} & \begin{tabular}{c} Quantity \\ Demanded \end{tabular} & \begin{tabular}{c} Marginal Revenue \\ (dollars) \end{tabular} & \begin{tabular}{c} Marginal Cost \\ (dollars) \end{tabular} & \begin{tabular}{c} Average Total Cost \\ (dollars) \end{tabular} \\ \hline \$ 146 & 150 & \$ 146 & \$ 25 & \$ 139.00 \\ \hline 138 & 250 & 126 & 50 & 103.30 \\ \hline 130 & 350 & 110 & 48 & 87.50 \\ \hline 122 & 450 & 94 & 94 & 89.00 \\ \hline 114 & 550 & 78 & 29 & 78.00 \\ \hline 106 & 650 & 62 & 46 & 73.00 \\ \hline \end{tabular}

From the table, we see that MR = MC at a quantity of 450 units (MR = 94, MC = 94).

The answer is 450

• MR = 146, MC = 25. MR > MC, so the monopolist should increase output.

• MR = 126, MC = 50. MR > MC, so the monopolist should increase output.

• MR = 110, MC = 48. MR > MC, so the monopolist should increase output.

• MR = 94, MC = 94. MR = MC, so this is the profit-maximizing level of output.

• MR = 78, MC = 29. MR > MC, so the monopolist should increase output.

• MR = 62, MC = 46. MR > MC, so the monopolist should increase output.

Next, we calculate the monopolist's profit at the profit-maximizing level of output (450 units).

Profit is calculated as: \[ \text{Profit} = (\text{Price} - \text{Average Total Cost}) \times \text{Quantity} \]

From the table, at 450 units:

• Price = \$122
• Average Total Cost = \$89.00

\[ \text{Profit} = (\$122 - \$89) \times 450 \] \[ \text{Profit} = \$33 \times 450 \] \[ \text{Profit} = \$14,850 \]

The answer is 14,850