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1、Chapter15ProblemsandApplications1.Thefollowingtableshowsrevenue,costs,andprofits,wherequantitiesareinthousands,andtotalrevenue,totalcost,andprofitareinmillionsofdollars:PriceQuantityTotalRevenueMarginalRevenueTotalCostProfit$1000$0----$2$-2901009$9368020016741270300215516
2、60400243618505002517184060024-18163070021-39122080016-5106109009-711-201,0000-912-12a.Aprofit-maximizingpublisherwouldchooseaquantityof400,000atapriceof$60oraquantityof500,000atapriceof$50;bothcombinationswouldleadtoprofitsof$18million.b.Marginalrevenueisalwayslessthanpri
3、ce.Pricefallswhenquantityrisesbecausethedemandcurveslopesdownward,butmarginalrevenuefallsevenmorethanpricebecausethefirmlosesrevenueonalltheunitsofthegoodsoldwhenitlowerstheprice.c.Figure15-2showsthemarginal-revenue,marginal-cost,anddemandcurves.Themarginal-revenueandmarg
4、inal-costcurvescrossbetweenquantitiesof400,000and500,000.Thissignifiesthatthefirmmaximizesprofitsinthatregion.Figure15-2d.Theareaofdeadweightlossismarked“DWL”inthefigure.Deadweightlossmeansthatthetotalsurplusintheeconomyislessthanitwouldbeifthemarketwerecompetitive,sincet
5、hemonopolistproduceslessthanthesociallyefficientlevelofoutput.e.Iftheauthorwerepaid$3millioninsteadof$2million,thepublisherwouldn’tchangetheprice,sincetherewouldbenochangeinmarginalcostormarginalrevenue.f.Tomaximizeeconomicefficiency,thepublisherwouldsetthepriceat$10perbo
6、ok,sincethat’sthemarginalcostofthebook.Atthatprice,thepublisherwouldhavenegativeprofitsequaltotheamountpaidtotheauthor.Figure15-32.Figure15-3illustratesanaturalmonopolistsettingprice,PATC,equaltoaveragetotalcost.TheequilibriumquantityisQATC.Marginalcostpricingwouldyieldth
7、epricePMCandquantityQMC.SinceforquantitiesbetweenQATCandQMCthebenefittoconsumers(measuredbythedemandcurve)exceedsthecostofproduction(measuredbythemarginalcostcurve),thedeadweightlossfromsettingpriceequaltoaveragetotalcostisthetriangularareashowninthefigure.3.Maildeliveryh
8、asanalways-decliningaverage-total-costcurve,sincetherearelargefixedcostsforequipment.Themarginal
