Johanna owns CoolnComfy, Inc., a monopolist in the market for portable air conditioners. Assume that Johanna's marginal cost is constant at $80 and that she faces the following demand schedule.
Price (Dollars) Quantity Demanded (Air conditioners)
$160 0
$140 1
$120 2
$100 3
$80 4
$60 5
$40 6
$20 7
$0 8
The graph below shows the demand curve for the monopolist's output.
Use the black points (X symbol) to plot the portion of the marginal revenue curve that corresponds to positive marginal revenue. Line segments will automatically connect the points. Remember to plot from left to right and plot between integers. For example, plot the marginal revenue for the first air conditioner at a quantity of 0.5 air conditioners, the second air conditioner at a quantity of 1.5, and so on.
Then use the orange line (square symbols) to plot the marginal cost curve.
Tool tip: For information on using the graph tool, click the Help button.