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Zorluk: OrtaMonopoly: Short-Run and Long-Run Price and Output Determination

The table below shows the short-run total revenue and total cost schedules of a monopolist at various output levels:

Output (Units)Total Revenue (\text{N})Total Cost (\text{N})
10500350
20900500
301,200700
401,400950
501,5001,250

What is the profit-maximizing output level for this monopolist?

  1. A
    20 units
  2. 30 unitsCevap
  3. C
    40 units
  4. D
    50 units

Cevap

The profit-maximizing output level is 30 units.
Total profit equals Total Revenue minus Total Cost. Calculating profit for each level yields N150 at 10 units, N400 at 20 units, N500 at 30 units, N450 at 40 units, and N250 at 50 units. The highest profit of N500 is achieved at 30 units. Furthermore, expanding output from 20 to 30 units adds N30 to revenue and N20 to cost (MR > MC), whereas expanding from 30 to 40 units adds N20 to revenue and N25 to cost (MR < MC). Thus, 30 units is the optimal profit-maximizing output.

Adım Adım Çözüm

1
Calculate Total Profit (TR - TC) for each output level.
Output 10: N500 - N350 = N150; Output 20: N900 - N500 = N400; Output 30: N1,200 - N700 = N500; Output 40: N1,400 - N950 = N450; Output 50: N1,500 - N1,250 = N250.
Profit is maximized at the output level where the positive gap between Total Revenue and Total Cost is greatest.
2
Verify using Marginal Revenue (MR) and Marginal Cost (MC) additions per 10-unit increment.
From 20 to 30 units: MR = N30, MC = N20 (MR > MC). From 30 to 40 units: MR = N20, MC = N25 (MR < MC).
The firm should expand output as long as MR exceeds MC, stopping at 30 units before MC exceeds MR.

Anahtar Kavram

Monopoly Short-Run Profit Maximization
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Konular

Monopoly: Short-Run and Long-Run Price and Output Determination

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