Stats Solutions

(Steps Shown) Chapter 14: Problems and Applications #3.3, pg. 500. Ed Scahill has acquired a monopoly on the production of baseballs (don't ask how), and faces

Question: Chapter 14: Problems and Applications #3.3, pg. 500.

Ed Scahill has acquired a monopoly on the production of baseballs (don't ask how), and faces the demand and cost situation given in the following table:

P Q Revenue MR TC MC
20 15000 330000
19 20000 365000
18 25000 405000
17 30000 450000
16 35000 500000
15 40000 555000
  1. Fill in the remaining values in the table.
  2. If Ed wants to maximize profits, what price should he charge and how many baseballs should he sell? How much profit will he make?
  3. Suppose the government imposes a tax of $50,000 per week on baseball production. Now what price should Ed charge, how many baseballs should he sell, and what will his profits be?

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