Illustrate what output level would monopolist produce

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Reference no: EM1370860

Q. A monopolist with a straight-line demand curve finds that it can sell two units at $12 each or 12 units at $2 each. Its fixed cost is $20 and its marginal cost is constant at $3 per unit.

a. Draw MC (marginal cost), ATC (average-total-cost), MR (marginal revenue) and demand curves for this monopolist.

b. Illustrate what output level would monopolist produce?

c. Illustrate what output level would a perfectly competitive firm produce?

Reference no: EM1370860

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