A monopolist faces market demand Q = 500 - 10 P, and has a marginal cost curve equal to MC = Q/10 - 10. I have computed the marginal revenue curve fro you which is given by MR = 50 - Q/5. If the firm is a single price monopolist, find the profit maximizing price and quantity and the resulting profit to the monopoly. What is the socially optimal price and quantity? What is the firm's profit at this price and quantity? Show (1) and (2) on a graph. Calculate consumer surplus (CS) and producer surplus (PS) and total surplus for parts (1) and (2). Show CS, PS, and DWL on the graph. Calculate the DWL due to monopoly. If the firm engages in first degree price discrimination, find the profit maximizing quantity and the resulting profit to the monopoly.
E3
A monopolist faces market demand Q = 500 - 10 P, and has a marginal cost curve equal to MC = Q/10 - 10. I have computed the marginal revenue curve fro you which is given by MR = 50 - Q/5.
If the firm is a single price monopolist, find the profit maximizing price and quantity and the resulting profit to the
What is the socially optimal price and quantity? What is the firm's profit at this price and quantity?
Show (1) and (2) on a graph.
Calculate
If the firm engages in first degree
Between (1) and (5), which pricing scheme is preferred by the monopolist and which by the consumers? why?
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