Question

The following table shows the demand for a product produced by a monopolist, who has
a constant marginal cost and an average total cost of $45 per unit.
Quantity (thousands of units) Price (dollars per unit)
0 120
1 105
2 90
3 75
4 60
5 45
6 30
a. Calculate the total revenue and marginal revenue for each level of quantity.
b. What are the profit-maximizing level of output and the price of the product?
c. Calculate the monopolist’s profit.
d. Calculate the Lerner Index for this industry.