What is most likely reason this firm exists as monopolist

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Reference no: EM131389069

Skates and Dates is a single-price monopolist (a skating rink) in a small town, facing an inverse demand curve of P = 35-0.5Q, where P is the price of admission and Q is the quantity of admissions. The rink faces the average total cost shown in the graph below and the marginal cost of production is constant at $5.

A) In words, what is the profit maximizing condition for Skates and Dates?

Write and graph an equation for the marginal revenue of Skates and Dates:

MR =

C) If this monopolist is a single price monopolist, graphically show the profit-maximizing level of output (Q), price (P), profit (?), and inefficiency (dead weight loss).

Pi=

inefficiency

D) In this case, what is the most likely reason this firm exists as a monopolist?

E) Does this seem like an industry where a monopoly is likely? Why or why not?

Reference no: EM131389069

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