Question 2 Tobacco King is a monopolist in the cigarette market in Nicotiana Republic, where the Singaporean dollar is u

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Question 2
Tobacco King is a monopolist in the cigarette market in Nicotiana
Republic, where the Singaporean dollar is used as the official
currency. The firm has a constant marginal cost of $2.00 per pack.
The fixed cost of the firm is $50 million. The firm’s demand curve
can be expressed as P = 8 - 0.04Q, where Q is the quantity demanded
(in millions of packs) and P is the price per pack (in $).
a. In a table show Tobacco King, the monopolist’s demand schedule,
total revenue, average revenue, and marginal revenue for prices $2,
$4, $6, and $8. (Hint: demand schedule refers to prices and
quantity demanded at those prices). (4 marks)
b. Based on the table created in answer to part (a), show Tobacco
King’s average revenue and marginal revenue curves in a graph.
Comment on why the AR curve lies below the MR curve in 100 words or
less. (3 marks)
c. Add marginal cost curve to the graph drawn in part (b). Find out
the price and quantity combination of cigarettes packets at which,
Tobacco King will maximize its profit. (3 Marks)