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Monopoly Problem

Essay by   •  January 15, 2012  •  Essay  •  617 Words (3 Pages)  •  1,436 Views

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Monopoly Problem

Robert Duvall and Kareem Abdul Jabar jointly patent a method for making Adam Smith bobble head dolls. The plan is for a very limited production run. They investigate the potential market for this unique novelty and find their sales and total cost schedules to be as follows: (The costs include a licensing fee to the estate of Adam Smith)

Sales Unit Price Total Cost

0 200 140

1 180 170

2 160 200

3 140 220

4 120 250

5 100 300

6 80 380

A) Calculate their TR, MR, ATC, MC and profit/loss schedules

sales Unit Price Total Cost TR MR ATC MC P/L

0 200 140

1 180 170 180 180 170 20 10

2 160 200 320 140 100 20 120

3 140 220 420 100 73.33 20 200

4 120 250 480 60 62.5 20 230

5 100 300 500 20 60 20 200

6 80 380 480 -20 63.33 20 100

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