Grader Instructions Excel 2016 Project Chapter 6 Monopoly Pr

Grader Instructions excel 2016 Projectchapter 6 Monopoly Problem 3

Start Excel. In cell F9, by using cell references, calculate the total revenue. Use cells C9 and D9. Copy the formula from cell F9 down the column to cell F23. In cell G10, by using cell references, calculate the marginal revenue. Use cells C9, F9, C10, and F10. Copy the formula from cell G10 down the column to cell G23. In cell H10, by using cell references, calculate the marginal cost. Use cells C9, E9, C10, and E10. Copy the formula from cell H10 down the column to cell H23. In cell D25, by using a cell reference, determine the price charged for entrance to the tourist attraction. Refer to an appropriate cell among D9-D23. In cell D26, by using a cell reference, determine the demand corresponding to the price in cell D25. Refer to an appropriate cell among C9-C23. In cell D28, by using cell references, calculate the profit corresponding to the price in cell D25 and the quantity demanded in cell D26. Use the appropriate cells among E9 - F23. Save the workbook. Close the workbook and then exit Excel. Submit the workbook as directed.

Paper For Above instruction

The Monopoly Pricing Strategy for a Tourist Attraction: An Analytical Approach

Introduction

The analysis of monopoly pricing strategies is essential for understanding how unique market entities set prices and determine optimal output levels to maximize profits. A monopolistic attraction such as a historical tourist site operates without direct competition, allowing it to influence prices based on demand elasticity and cost structures. This paper explores a comprehensive approach to calculating total revenue, marginal revenue, marginal costs, optimal price, demand, and profitability for such a monopoly, based on provided demand schedules. The methodology emphasizes the significance of precise calculations and strategic decision-making in industry-specific contexts, utilizing Microsoft Excel functions for computational accuracy.

Demand and Revenue Analysis

The demand schedule indicates various price points at which visitors are willing to pay, along with the corresponding number of visitors (quantity demanded). Using these data points, total revenue (TR) at each level is computed as the product of price and quantity demanded: TR = Price x Quantity. By referencing cells C9 and D9 in Excel, the total revenue calculations are established for each data point in the schedule, extending this formula down to account for all available demand levels. This step provides a foundational understanding of how revenue fluctuates with changes in demand, essential for setting optimal pricing strategies.

Marginal Revenue Calculation

Following the total revenue calculations, marginal revenue (MR) reflects the change in total revenue resulting from selling an additional unit. It is calculated as the difference in TR between successive demand points divided by the change in quantity: MR = (TR2 - TR1) / (Q2 - Q1). In Excel, this is achieved by referencing cells C9, F9, C10, and F10, and copying the formula downward. These calculations highlight the diminishing or increasing returns at different sales levels, instrumental for determining the price point where marginal revenue equals marginal cost.

Cost Analysis and Marginal Cost Determination

Accurate cost assessment is crucial for profit maximization. Total costs (TC) are provided for each demand level, reflecting operational, fixed, and variable expenses. Marginal cost (MC) signifies the additional cost incurred by producing one more unit and is computed as the difference in total costs between successive points divided by the change in quantity: MC = (TC2 - TC1) / (Q2 - Q1). Utilizing cell references C9, E9, C10, and E10 in Excel, these calculations facilitate a nuanced understanding of cost behavior concerning output levels, informing pricing strategies.

Optimal Price, Demand, and Profit Calculation

The primary objective is to identify the profit-maximizing price and quantity. This involves locating the point where marginal revenue equals marginal cost (MR = MC). In the Excel sheet, the price is determined by referencing the appropriate demand cell among D9-D23, corresponding to the point where MR approximates MC. The quantity demanded at this price is identified similarly, allowing for an in-depth profitability analysis. Profit is calculated as total revenue minus total cost: Profit = TR - TC, with specific values derived from cell references E9-F23, aligning with the optimal price and demand level. This comprehensive calculation informs strategic decisions to maximize earnings.

Conclusion

Effective monopolistic pricing requires meticulous analysis of demand, revenue, costs, and marginal considerations. By leveraging Excel for precise computations, industry stakeholders can identify optimal pricing points that balance consumer demand with cost structures, thereby maximizing profits. The outlined methodology underscores the critical role of data-driven decision-making in monopoly contexts, emphasizing the importance of comprehensive financial analysis and strategic foresight in maintaining competitive advantage and profitability in niche markets such as historic tourist attractions.

References

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