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Monopoly Profit Maximization Worksheet A monopolist has the following total cost data and demand schedule: Output (units) Price ($) Total Cost ($) TR MR 0 1 2 3 4 5 6 7 8 9 10 11 12 12 11 10 9 8 7 6 5 4 3 2 1 0 5 10 15 20 25 30 35 40 45 50 55 60 65 0 11 20 27 32 35 36 35 32 27 20 11 0 X 11 9 7 5 3 1 -1 -3 -5 -7 -9 -11 a. Find the profit maximizing quantity, price and profit. Note that MC=$5 at all levels of output. Set MR=MC=5 and we find Q=4. P=$8 and Profit = $8*4 – 25 = $7 b. Suppose that total fixed cost increases by $1. Find the profit maximizing quantity, price and profit. If TFC increases, this does not change the MC=5 in the table above. So the firm will still produce Q=4 and P=$8. However profit is one dollar lower and now equal to $6.