Description 
In this tool you can experiment with Marge's business from an economic perspective by examining and manipulating the economic model of monopoly. You can set the price or quantity of O-Burgers by adjusting either the price slider or the quantity slider. 

The fact that Marge has a monopoly does not guarantee her a profit. There are four pre-defined scenarios that you should examine--positive profit, zero profit, negative profit, and shut-down profit. Each of these scenarios will set the curves to different positions. Play with them and see how much of a profit you can earn. 

In addition, you can increase or decrease market demand to see what effect changes in demand will have on Marge's profitability. 

Every time you adjust a slider the table will update to reflect your choices. 

1. Adjust the price and/or quantity sliders on the graph in an attempt to maximize profit. 
2. Choose a profit example--positive, zero, negative, shut-down--to see how each of these conditions affects the graph. 
3. Adjust the demand slider to alter economic conditions. 

Notes: 
• When you move one slider the tool adjusts the other slider for you. Why? Because, though Marge is a monopolist, she is still subject to market demand for Ostrich Burgers. She can choose price or quantity--not both. 
• In the case of monopolists, marginal revenue is always less than price, so the marginal revenue (MR) curve always lies below demand. 
• For monopolists, maximum profit occurs when total revenue (TR) is as far above total cost (TC) as possible. Mathematically, we can prove that this is also the point where the TR and TC curves have the same slope. The slope of the TR curve is defined as "change in TR/change in quantity", which is marginal revenue. The slope of the TC curve, as we already know, is MC. So profit maximization occurs when MR = MC. This is the golden rule of profit maximization for monopolies. 

Abbreviations: 
P = price 
Q = quantity 
TR = total revenue 
TC = total cost 
ATC = average total cost 
AVC = average variable cost 
MR = marginal revenue 
MC = marginal cost 
 
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