Marginal Analysis

Stuart Palmer

Q
0 1 2 3 4 5 6

B(Q)

C(Q)
0

N(Q)
0 170 230 270 270 225 170

MB(Q)
-200 100 90 60 30 20

MC(Q) MNB(Q)
-30 40 50 60 75 75 -170 60 40 0 -45 -55

200 300 390 450 480 500

30 70 120 180 255 330

Marginal Analysis
600

500

400 B(Q) 300 C(Q) N(Q) MB(Q) MC(Q) MNB(Q) 100

200

0 0 -100 2 4 6 8

1) Where Net Benefit has the highest number on the chart 2) Where Net Benefit is at its peak on the graph 3) Where Total Benefit and Total Cost lines are the furthest apart on the graph 4) Where MB = MC on the chart 5) Where the MB and the MC lines intersect on the graph 6) Where MNB is zero on the chart 7) Where MNB crosses the X-axis on the graph

Output 0 1 2 3 4 5

Price 20 18 16 14 12 10

TR 0 18 32 42 48 50

MR -18 14 10 6 2

TC 20 21 24 30 40 55

ATC -21 12 10 10 11

MC -1 3 6 10 15

Monopoly Profit --3 8 12 8 -5

Copy your work fro Label the tabs at t Delete any extra s Using Create 2 embedde

1st graph- Monopoly

60 50 40 Price 30 20 10 0 -10 0 2 Quantity 4 6 Price TR MR TC ATC MC Monopoly Profit

In a text box write Draw the perimete In a separate text Highlight the optim Submit it to your e

Four steps to solve monop

25 20 15 Price 10 5 0 0 1

2nd Graph-Monopoly

1. MR=MC Q=3 2. Thefirms profit is given the length width =market 3. Wherever ATC curve 4. Shutdown happens at p

Price MR ATC MC

3 Quantity

Copy your work from your marginal analysis assignment to the first tab for the e-Portfolio assignment . 1pt Label the tabs at the bottom: Marginal Analysis and Monopoly by right clicking on them and then clicking rename. 2pts Delete any extra sheets by right clicking on the extra tab and then click delete. 1pt Using formulas, calculate the missing cells for the monopoly. 15pts Create 2 embedded graphs (title each graph and label the X-axis and y-axis for each). 6pts 1st graph: graph the following lines against output - price (demand), TR, MR, ATC, TC, MC, and Profit. 7pts draw an red line with a blue glow to indicate where it is optimal to produce. 1pt 2nd graph: graph the following lines against output - price (demand), MR, ATC, and MC. 4pts draw an red line with a blue glow to indicate where it is optimal to produce. 1pt In a text box write the 4 steps to solve for the monopoly profit off of the graph and what is steps information is. 8pts Draw the perimeter of the monopoly profit in black dashed lines. 1pt In a separate text box relate what you learned from the marginal analysis graph to the 1st graph. 8pts Highlight the optimal output level in the chart in a bright blue. 1pt Submit it to your e-Portfolio and enter in your web address to your e-Portfolio to the drop box in Connect. 2 pts

Four steps to solve monoply profit 1. MR=MC Q=3 2. Thefirms profit is given by area ABCD=> 3 is the length width =market price 3. Wherever ATC curve lies below MR 4. Shutdown happens at point

ng rename. 2pts

Profit. 7pts

mation is. 8pts