Answer to Question #225499 in Microeconomics for yummie

Question

In Thailand, a firm named SunFly is planning to monopolize its streaming services. The table below displays SunFly's monthly streaming service pricing as well as the quantity demanded for each pricing. 

Price (฿):

1. ฿ 130
2. ฿ 120
3. ฿ 110
4. ฿ 100
5. ฿ 90
6. ฿ 80
7. ฿ 70
8. ฿ 60
9. ฿ 50

Quantity demanded:

1. 10,000
2. 20,000
3. 30,000
4. 40,000
5. 50,000
6. 60,000
7. 70,000
8. 80,000
9. 90,000

a.) Calculate 1.total revenue, 2.average total revenue, 3.marginal revenue, 4.total cost, 5.average total cost, and 6.profit using the information given. (The firm has made a ฿3 million investment in their streaming offerings. In addition, the firm has faced a marginal cost of ฿10 for each streaming service it offers. )

Answer 1

Total revenue = price x quantity demanded for each price level

Total revenue

1. 1,300,000
2. 2,400,000
3. 3,300,000
4. 4,000,000
5. 4,500,000
6. 4,800,000
7. 4,900,000
8. 4,800,000
9. 4,500,000

Average total revenue is given by the total revenue divided by the respective quantities

Average total revenue

1. 130
2. 120
3. 110
4. 100
5. 90
6. 80
7. 70
8. 60
9. 50

Marginal Revenue = (Change in Revenue) / (Change in Quantity)

MARGINAL REVENUE

1. 130
2. 110
3. 90
4. 70
5. 50
6. 30
7. 10
8. -10
9. -30

Total cost = integration of marginal cost with respect to quantity

marginal cost (mc) = 10

Total cost = 10q + c

c is the fixed cost which in this case we have not been given therefore c is presumed to be 0.

Therefore Total cost = 10q

substituting with respective quantities we get;

Total cost

1. 100,000
2. 200,000
3. 300,000
4. 400,000
5. 500,000
6. 600,000
7. 700,000
8. 800,000
9. 900,000

Average total cost is given by the total cost divided by the respective quantities

Average total cost

1. 10
2. 10
3. 10
4. 10
5. 10
6. 10
7. 10
8. 10
9. 10

Profit is given by Total revenue less total cost

Profit

1. 1200000
2. 2300000
3. 3200000
4. 3900000
5. 4400000
6. 4700000
7. 4800000
8. 4700000
9. 4400000