1. Use the information in the table below to answer the following questions.
|
Q
|
AVC
|
ATC
|
MC
|
MR1
|
P1
|
MR2
|
P2
|
|
0
|
-
|
-
|
-
|
-
|
130.00
|
-
|
80.00
|
|
1
|
55.70
|
155.70
|
55.70
|
120.00
|
120.00
|
70.00
|
70.00
|
|
2
|
52.80
|
102.80
|
49.90
|
100.00
|
110.00
|
50.00
|
60.00
|
|
3
|
51.30
|
84.63
|
48.30
|
80.00
|
100.00
|
30.00
|
50.00
|
|
4
|
51.20
|
76.20
|
50.90
|
60.00
|
90.00
|
10.00
|
40.00
|
|
5
|
52.50
|
72.50
|
57.70
|
40.00
|
80.00
|
-10.00
|
30.00
|
|
6
|
55.20
|
71.87
|
68.70
|
20.00
|
70.00
|
-30.00
|
20.00
|
|
7
|
59.30
|
73.59
|
83.90
|
0.00
|
60.00
|
-50.00
|
10.00
|
|
8
|
54.80
|
77.30
|
103.30
|
-20.00
|
50.00
|
-70.00
|
0.00
|
|
9
|
71.70
|
82.81
|
126.90
|
-40.00
|
40.00
|
-90.00
|
-
|
|
10
|
80.00
|
90.00
|
154.70
|
-60.00
|
30.00
|
-110.00
|
-
|
|
11
|
89.70
|
98.79
|
186.70
|
-80.00
|
20.00
|
-130.00
|
-
|
|
12
|
100.80
|
109.13
|
222.90
|
-100.00
|
10.00
|
-150.00
|
-
|
- Suppose the monopolistically competitive firm above is facing the following price and marginal revenues found in the MR1 and P1 columns. How much should this firm produce, and what price should they charge? Explain, calculating total profit or loss earned at this quantity.
- Now suppose there is a decrease in demand, and a corresponding decrease in the price and marginal revenue to the numbers shown in the MR2 and P2 columns. How much should this firm produce now, and what price should they charge? Explain, calculating total profit or loss earned at this quantity.