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Principles of Marketing Homework - Pricing Exercise
1. The graph below shows the demand curve (D), marginal revenue curve (MR), marginal cost curve (MC), average total cost curve (ATC), and long-run average total cost curve (LRATC) for a monopolist.
(a) Using the numbers given in the graph, identify each of the following for the profit-maximizing monopolist.
(i) The quantity produced
(ii) The price
(b) Suppose the monopolist perfectly price discriminates and chooses the quantity that maximizes profit.
Determine the dollar value of each of the following.
(i) The monopolist's profit
(ii) The consumer surplus
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