Figure 14-1: Average and marginal revenue for a competitive firm
Price, p, $ per unit
Demand curve
p1
A
B
q
q+1
Quantity, q, units per year
Image by MIT OpenCourseWare.
11-1
Figure 14-2: Average and marginal revenue for a monopolistic firm
Price, p, $ per unit
Demand curve
p1
p2
C
A
B
Q Q+1
Quantity, Q, units per year
Image by MIT OpenCourseWare.
Figure 14-3: Marginal revenue for a monopolist
24
P, $ per unit
MR
0
12
Demand
24
Q, units per day
Figure 14-4: Profit maximization for a monopolist
P, $ per unit
MC
24
p = 18
e
AC
AVC
12
8
6
0
Demand
6
MR
12
24
Q, units per day
Figure 14-5: Deadweight Loss of Monopoly
24
MC
Demand
MR
C = $2
p, $ per unit
pm = 18
pc = 16
MR = MC = 12
0
A = $18
B = $12
em
ec
E = $4
D = $60
Q m = 6 Qc = 8
12
Q, Units per day
24
Image by MIT OpenCourseWare.
11-5
Figure 14-6: Social welfare with perfect price discrimination
P, $ per units
24
MC
A
em
18
16
B
C
ec
E
Demand
D
MR
0
6
8
12
24
Q, units per day
Image by MIT OpenCourseWare.
MIT OpenCourseWare
http://ocw.mit.edu
14.01SC Principles of Microeconomics
Fall 2011
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