Sample Problems
Micro
(1) Draw the long run equilibrium graph for a perfectly competitive firm. Be sure to label the profit maximizing level of output Q*, the profit maximizing price P*, the profit maximizing ATC*, and shade any profit or loss.
(2) Why is a competitive industry generally better for society than a monopolistic industry?
(3) Fill in the following table for a monopoly.
|
Q |
P |
TR |
TC |
Profit |
MR |
MC |
|
10
|
$20 |
|
$150 |
|
|
|
|
11
|
$19 |
|
$155 |
|
||
|
12
|
$18 |
|
$161 |
|
||
|
13
|
$17 |
|
$170 |
|
||
|
14
|
$16 |
|
|
$39 |
||
|
15
|
$15 |
|
$210 |
|
a. What is the highest profit possible?
b. What is the profit maximizing level of output?
c. What is the profit maximizing price?
- In the graph for a monopoly below, find the profit maximizing level of output Q*, the profit maximizing price P*, and the average total cost ATC*. Shade the profit region. $
Q