question archive Suppose a monopolist charges the same price for each unit produced
Subject:EconomicsPrice:8.89 Bought3
Suppose a monopolist charges the same price for each unit produced. The production technology of this monopolist produces a cost function given by TC = (2*Q) . The industry Demand curve is given by P= 140 -(2*Q)
a) Find the equilibrium price, quantity, profit, consumer surplus for the uniform price monopoly, who cannot price discriminate. You need to find out marginal revenue and marginal cost.
b) If this monopoly would become competitive, find the equilibrium price, quantity, profit, consumer surplus for that competitive firm.
c) If this monopolist is allowed to do first degree price discrimination, then find the equilibrium quantity, profit, and consumer surplus for that first degree price discriminating monopolist
d) Compare the total social surplus for part a, b and c of this question. Who creates the largest social surplus, why? Who creates the largest deadweight loss , why?
e) Draw a Graph showing the equilibrium quantity choices of uniform price monopoly, competitive firm and first degree price discriminating monopoly on a single graph.
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