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Quantity of Economics Tutoring Demanded (hours) Price of Economics Tutoring (per hour)
0 6
1 5
2 4
3 3
4 2
5 2
6 2
Suppose Eric is the only economics tutor in town and therefore holds a monopoly on the sale of economics tutoring. The table shows the demand schedule for his services. Eric can offer additional hours of tutoring at a constant marginal cost of $1.50 per hour and he has no fixed costs.
a. If Eric acts as a monopolist how many hours will he offer and what price will he charge?
b. Calculate Eric's monopoly profit.
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