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Regulating Monopoly

Regulating Monopoly . Activity 37. $5.00. $4.00. MC. $3.00. ATC. Costs/Revenue. $2.00. $1.00. MR. D. 1,000. 2,000. 3,000. 4,000. 5,000. Quantity . Unregulated Monopoly P>MC. $5.00. $4.00. MC. $3.00. ATC. Costs/Revenue. Output: 1,500 Price: $4.00 TR: (4x1500) $6,000.

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Regulating Monopoly

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  1. Regulating Monopoly Activity 37

  2. $5.00 $4.00 MC $3.00 ATC Costs/Revenue $2.00 $1.00 MR D 1,000 2,000 3,000 4,000 5,000 Quantity

  3. Unregulated Monopoly P>MC $5.00 $4.00 MC $3.00 ATC Costs/Revenue Output: 1,500 Price: $4.00 TR: (4x1500) $6,000. TC: (3x1500) $4,500. Per unit profit: $1.00 $2.00 $1.00 MR D 1,000 2,000 3,000 4,000 5,000 Quantity

  4. Marginal Cost Pricing P=MC Socially Optimal Price $5.00 $4.00 $3.00 MC ATC Costs/Revenue Output: 3,000 Price: $1.50 TR: (1.5x3000) $4,500. TC: (2.5x3,000) $7,500. total loss: $3,000 $2.00 $1.00 MR D 1,000 2,000 3,000 4,000 5,000 Quantity

  5. Cost of Service Pricing Average Cost Pricing P=ATC Fair Return Price $5.00 $4.00 $3.00 ATC Costs/Revenue MC $2.00 Output: 2,500 Price: $2.50 TR: (2.5x2,500) $6,250. TC: (2.5x2,500) $6,250. Per unit profit: $0.00 $1.00 MR D 1,000 2,000 3,000 4,000 5,000 Quantity

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