Questions -
Q1. Olivia's Optimum Olive Oil, Inc., a single-price monopoly, faces the following demand schedule and total cost figures for their premium virgin olive oil
|
Price
|
Quantity Demanded
|
Total Revenue
|
Marginal Revenue
|
Quantity Produced
|
Total Cost
|
Marginal Cost
|
|
$10
|
0
|
|
|
0
|
1
|
|
|
8
|
1
|
|
|
1
|
3
|
|
|
6
|
2
|
|
|
2
|
7
|
|
|
4
|
3
|
|
|
3
|
13
|
|
|
2
|
4
|
|
|
4
|
21
|
|
|
0
|
5
|
|
|
5
|
31
|
|
Complete the table above and then use that information to answer the questions which follow:
Q2. What will be the profit-maximizing output and price?
Q3. What will be the amount of total profit at the above price/output combination?
Q4. Draw a diagram showing this profit maximization, being sure to include all relevant graphs and labeling everything, including the profits.
Q5. Compared to a perfectly competitive firm producing olive oil, is Olivia's output decision efficient? Explain your answer.