A monopolist's maximized rate of economic profits is $1500 per week. Its weekly output is 500 units, and at this output rate, the firm's marginal cost is $32 per unit. The price at which it sells each unit is $42 per unit. At these profit and output rates, what are the firm's average total cost and marginal revenue?

Average total cost = $39

Marginal revenue = $32 per unit

Explanation:

The computation of average total cost and marginal revenue is shown below:-

Average total cost = Selling price - (Economic profit ÷ Weekly output)

                              = $42 - ($1,500 ÷ 500)

                              = $42 - 3

                              = $39

Marginal revenue = Marginal cost

So,

Marginal revenue = $32 per unit

Therefore for computing the average total cost and marginal revenue we simply applied the above formula.

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