Dominick Salvatore Schaums Outline of Microeconomics, 4th edition Schaums Outline Series 2006

224 PRICE AND OUTPUT UNDER PURE MONOPOLY [CHAP. 9
(a) Table 9.9
P ($) Q TR ($) STC ($)
Total
Profits
($)
12 0 0 10 210
11 1 11 17 26
10 2 20 18 þ2
9 3 27 21 þ6
8 4 32 30 þ2
7 5 35 48 213
(b)
The best, or optimum, level of output for this monopolist in the short run is three units per time period. At this
level of output, the monopolist charges a price of $9 and makes a maximum short-run total profit of $6 per time
period.
See Fig. 9.12. Note that the monopolist’s TR curve takes the shape of an inverted U except when the D curve
facing the monopolist is a rectangular hyperbola. In that case the TR curve is a horizontal line. At the best level
of output, the slope of the TR curve is equal to the slope of the STC curve, or MR ¼ SMC.
SHORT-RUN EQUILIBRIUM UNDER PURE MONOPOLY: MARGINAL APPROACH
9.9 Show with the marginal approach (a) numerically and (b) geometrically the best short-run level of
output for the pure monopolist of Problem 9.8 (c) Comment on the graph of part (b).
Fig. 9-12