Estimate the selling price and profit, Cost Accounting

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Slash and Burn is a monopolist that can sell its output at these prices and with these total costs:

                   Output             Price        Total Cost

                     4                    $27                 $28

                     5                      26                   34

                     6                      25                   42

                     7                      24                   52

                     8                      23                   64

                     9                      22                   88

                    10                      21                 105

                    11                      20                 125

                    12                      19                 148

                    13                      18                 174

                    14                      17                 204

a)   What level of output will Slash and Burn choose to produce? What will the selling price and profit be?

b)   Suppose that Slash and Burn produced at the level that a perfectly competitive industry would, with marginal cost equal to price. What would be the output, price and profit?


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