• ECN210-1
• Assignments
• Module 5: Critical Thinking
Option #1: Cookies Part II
Refer back to the cost calculations from your module 4 assignment (the original calculations with the $30 fixed costs). Your cookies are sold in a perfectly competitive market with a market price of $5 per dozen.
• Calculate the profit-maximizing quantity of dozens of cookies for your cookies.
• Calculate the level of profit earned at that level of production.
• Now repeat the previous steps but with the $15 fixed costs calculations.
• Compare the results.
Now assume you have a monopoly with your cookies with the following demand curve $10 per dozen for one dozen, $9 per dozen for two dozen, $8 per dozen for three dozen, $7 per dozen for four dozen, $6 per dozen for five dozen, $5 per dozen for six dozen, $4 per dozen for seven dozen, $3 per dozen for eight dozen, $2 per dozen for nine dozen, and $1 per dozen for ten dozen. Start with the costs calculated with the $30 fixed costs.
• Calculate the profit-maximizing quantity of dozens of cookies for your cookies.
• Calculate the level of profit earned at that level of production.
• Now repeat the previous steps but with the $15 fixed costs calculations.
• Compare the monopoly results.
Bring all your results together.
• Compare the perfect competition and monopoly results.
Adhere to the following standards:
• Your paper should be 3-4 pages in length, not including the title or references pages.
• Include at least 3 scholarly references.
• The Economics Library Guide (Links to an external site.) is a good tool to use to start your research (sources such as The Balance, EconomicsHelp.org, Investopedia, and similar websites are not acceptable).
• Review the grading rubric for Module 5.
• Be sure to follow the CSU Global Writing Center (Links to an external site.) for your citations.
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