Consider the special case of a monopoly in which mc = 0. let's find the firm's best choice when more goods can be produced at no extra cost. a great deal of e-commerce is close to this model, where the fixed cost of inventing the product and satisfying government regulators is the only cost that matters. consider a monopoly facing the following demand curve and fixed costs: p = 120 – 12q; fixed costs = 1,000 should the firm go into business? if so, how much should the firm produce?

No, because of loss.

Explanation:

Given that it is a case of monopoly where, MC = 0

Demand curve: P = 120 - 12Q

Fixed Cost (FC) = 1,000

profit maximizing condition for a monopolist, MR = MC

Total Revenue(TR) = PQ = 120Q - 12Q²

Marginal Revenue(MR) =

                                      = 120 - 24Q

Now, MR = MC

120 - 24Q = 0

Q = 5 units

P = 120 - 12 × 5 = $60

Profit/ Loss = TR - FC [ ∴ TR = 300]

= 300 - 1000

= -700

So, there is loss incurred if the firm go into the business.

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

your welcome leave a rate and a < 3

answer; functional fixedness;