In the follow situation for a monopoly firm in the short run, what is the profit maximizing level of output. Please show your work and be as precise as possible.
Q P FC MC______________________________________
0 $25
$5
1 $20
$6
2 $18
$7
3 $16
$8
4 $14
2. If a street artist thinks that customers are have the following demand:
Price $90 Quantity demanded 1
Price $70 Quantity demanded 2
Price $50 Quantity demanded 3
Price $30 Quantity demanded 4
And the fixed cost for her business is $40, while it costs her $60 to paint each additional painting, how many paintings should she sell?
Would she do better if she could price discriminate? Why?