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Currently, a monopolist’s profit-maximizing output is 600 units per week and it sells its output at a price of $40 per unit. The firm’s total costs are $6,000 per week. The firm is maximizing its profit, and it earns $25 in extra revenue from the sale of the last unit produced each week.

a. What are the firm's weekly economic profits?
b. What is the firm's marginal cost?
c. What is the firm's average total cost?

Respuesta :

jepessoa

Answer:

a. What are the firm's weekly economic profits?

  • The company's weekly economic profit = total revenue - total accounting cost - total opportunity costs = (600 units x $40) - $6,000 = $24,000 - $6,000 = $18,000

b. What is the firm's marginal cost?

  • since the firm is maximizing its profits, its marginal revenue = marginal cost. Since the marginal revenue of the last unit sold was $25, then the marginal cost of the last unit sold must also be $25.

c. What is the firm's average total cost?

  • the firm's average total cost = total cost / total output = $6,000 / 600 units = $10 per unit

A monopolist market is a market that is expressed theoretically as the place where a single company offers the products and services to its customers. It is very opposite to the perfectly competitive market that includes the infinite number of firms operating with the number of buyers.  

a.  The firm's weekly economic profits are:

The company's weekly economic profit = total revenue - total accounting cost - total opportunity costs

[tex]= (600\: units \times \$40) - \$6,000 = \$24,000 - \$6,000 = \$18,000[/tex]

b.  The firm's marginal cost is:

Since the firm is maximizing its profits, its marginal revenue = marginal cost. Since the marginal revenue of the last unit sold= $25, then the marginal cost of the last unit sold = $25.

c. The firm's average total cost is:

The firm's average total cost =[tex]\frac{\text{total cost}}{\text{total cost}}[/tex]

[tex]= \frac{ \$6,000}{ 600 \:units }= \$10\: per\: unit[/tex]

To know more about the calculation of the costs of the economic profits costs, refer to the link below:

https://brainly.com/question/15576018

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