Problem
A monopolist with a straight-line demand curve finds that it can sell 2 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.
1. Draw the MC, ATC, MR, and demand curves for this monopolist.
2. At what output level would the monopolist produce?
3. At what output level would a perfectly competitive firm produce?