B. GRAPHS

1. Graph 1:  Plot price

(P) and marginal revenue (MR) with quantity produced (QF) on the 

    horizontal axis.

2. Graph 2: Plot total revenue (TR) and total costs (TCwith quantity produced (QF) on the 

    horizontal axis.

3. Graph 3: Plot price (P), marginal revenue (MR), marginal cost (MC) and average total 

    cost (ATC) with quantity produced (QF) on the horizontal axis.

C.  PROBLEMS

1. From Graph 1describe the relationship between the firm’s Demand Curve and its Marginal Revenue Curve.  Answer:A. PRODUCTION COSTSAssume your business sells its products in a Monopoly Market. Let’s say that fixed costs (FC) are $47.AFCAVCATCperQFIRMperPriceperFCVCTotalTCMCunitunitunitTRMRProfit0$35.00$0.00$33.00$1.00$30.00$3.00$27.00$7.00$24.00$15.00$21.00$31.006$18.00$55.00$15.00$95.00$12.00$151.009$9.00$231.00

ScholarMatic: Explanation & Answer

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