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You have been hired by a monopoly to analyze the following production data and prepare a proposal suggesting how to maximize profits.

 Monopoly Firm

Price

MR

TR

Q

TC

MC

ATC

AVC

6.4

3.1

 

1000

6400

3

 

3.24

The data provided by the company is incomplete. You are to complete columns  TR and  ATC in the chart and make a short-run recommendation, using one of the recommendation actions from the list below. Remember that your goal is to maximize profits. Prepare a one page paper that includes your solutions to the table, your recommendation action, and justification supporting your recommendation.

Recommendation actions:

  1. Remain at current output level.
  2. Increase output
  3. Decrease output
  4. Shut down
  5. Uncertain-the figures provided cannot possibly be correct

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