(Table: Demand for Economics Tutoring) Look at the Table Demand

question 108

Essay

(Table: Demand for Economics Tutoring) Look at the table Demand for Economics Tutoring.Suppose Eric is the only economics tutor in town and therefore holds a monopoly on the sale of economics tutoring.The table shows the demand schedule for his services.Eric can offer additional hours of tutoring at a constant marginal cost of $2 per hour, and he has no fixed costs.a) If Eric acts as a monopolist, how many hours will he offer and what price will he charge?
b) Calculate Eric's monopoly profit.

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Definitions:

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made periodically, often at the end of an accounting period, rather than continuously.

Specific Invoice Method

Valuing of inventory where each item is identified with a specific invoice.

Cost of Goods Sold

Financial obligations directly related to producing a company’s saleable goods, encompassing material and labor costs.

Periodic Inventory System

A method of inventory valuation where updates to inventory levels and cost of goods sold are made periodically at the end of an accounting period, rather than after each sale or purchase.