Problem
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 the MC, ATC, MR, and demand curves for this monopolist.
b. At what output level would the monopolist produce?
c. At what output level would a perfectly competitive firm produce?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.