The market demand curve for a commodity and the total cost for a monopoly firm producing the commodity is given by the schedules below- Use the information to calculate the following -WlinetextQuantity - 0 - 1 - 2 - 384 - 5 - 6 - 7 - 811WlinetextPrice - 52 - 44 - 37 - 31 - 26 - 22 - 19 - 16 - 13 1Wline end array WlineWlinePrice - 10 - 60 - 90 - 100 - 102 - 105 - 109 - 115 - 12511 Wlinearray i The MR and MC schedules-ii The quantities for which MR and MC equal-iii The equilibrium quantity of output and the equilibrium price of the commodityiv Total revenue- total cost and total profit in equilibrium

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Standard XI

Economics

Supply Curve

The market de...

Question

The market demand curve for a commodity and the total cost for a monopoly firm producing the commodity is given by the schedules below. Use the information to calculate the following :

$\begin{matrix} Quantity & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 Price & 52 & 44 & 37 & 31 & 26 & 22 & 19 & 16 & 13 \end{matrix}$

$\begin{matrix} Quantity & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 Price & 10 & 60 & 90 & 100 & 102 & 105 & 109 & 115 & 125 \end{matrix}$

(i) The MR and MC schedules.

(ii) The quantities for which MR and MC equal.

(iii) The equilibrium quantity of output and the equilibrium price of the commodity

(iv) Total revenue, total cost and total profit in equilibrium

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Solution

(i)

(ii) At 6 units, MR = MC

(iii) When MR = MC (i.e., equilibrium), Equilibrium Quantity = 6 units and Equilibrium Price = Rs 19

(iv) Total profits in equilibrium = TR - TC

= Rs 114 - Rs 109 = Rs 5

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Similar questions

The market demand curve for a commodity and the total cost for a monopoly firm producing the commodity is given in the schedules below.

Quantity	0	1	2	3	4	5	6	7	8
Price	52	44	37	3	26	22	19	16	13

Quantity	0	1	2	3	4	5	6	7	8
Total Cost	10	60	90	100	102	105	109	115	125

Use the information given to calculate the following:

(a) The MR and MC schedules

(b) The quantities for which MR and MC are equal

(d) The total revenue, total cost and total profit in the equilibrium

Q. The market demand curve for a commodity and the total cost for a monopoly firm producing the commodity is given by the schedules below. Use the information to calculate the following:

Quantity	0	1	2	3	4	5	6	7	8
Price	52	44	37	31	26	22	19	16	13

Quantity	0	1	2	3	4	5	6	7	8
Total Cost	10	60	90	100	102	105	109	115	125

(a) The MR and MC schedules
(b) The quantities for which the MR and MC are equal
(c) The equilibrium quantity of output and the equilibrium price of the commodity
(d) The total revenue, total cost and total profit in equilibrium.

A monopoly firm has a total fixed cost of Rs 100 and has the following demand schedule:

Quantity	1	2	3	4	5	6	7	8	9	10
Price	100	90	80	70	60	50	40	30	20	10

Find the short run equilibrium quantity, price and total profit. What would be the equilibrium in the long run? In case the total cost is Rs 1000, describe the equilibrium in the short run and in the long run.

Considering the same demand curve as in exercise 22, now let us allow for free entry and exit of the firms producing commodity X. Also assume the market consists of identical firms producing commodity X. Let the supply curve of a single firm be explained as

q^S_f = 8 + 3p for p ≥ 20

= 0 for 0 ≤ p < 20

(a) What is the significance of p = 20?

(b) At what price will the market for X be in equilibrium? State the reason for your answer.

Suppose the value of demand and supply curves of a Commodity-X is given by the following two equations simultaneously:

Qd = 200 –10p Qs = 50 + 15p

i) Find the equilibrium price and equilibrium quantity of commodity X.

ii) Suppose that the price of a factor inputs used in producing the commodity has changed, resulting in the new supply curve given by the equation

Qs’ = 100 + 15p

Analyse the new equilibrium price and new equilibrium quantity as against the original equilibrium price and equilibrium quantity.

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(i) (ii) At 6 units, MR = MC (iii) When MR = MC (i.e., equilibrium), Equilibrium Quantity = 6 units and Equilibrium Price = Rs 19 (iv) Total profits in equilibrium = TR - TC = Rs 114 - Rs 109 = Rs 5

(i)

(ii) At 6 units, MR = MC

(iii) When MR = MC (i.e., equilibrium), Equilibrium Quantity = 6 units and Equilibrium Price = Rs 19

(iv) Total profits in equilibrium = TR - TC

= Rs 114 - Rs 109 = Rs 5