11.26. Suppose that a monopolists market demand is given by P ! 100 # 2Q and that...
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11.26. Suppose that a monopolist’s market demand is given by P ! 100 # 2Q and that marginal cost is given by MC ! Q/2.
a) Calculate the profit-maximizing monopoly price and quantity.
b) Calculate the price and quantity that arise under perfect competition with a supply curve P ! Q/2.
c) Compare consumer and producer surplus under monopoly versus marginal cost pricing. What is the deadweight loss due to monopoly?
d) Suppose market demand is given by P ! 180 # 4Q.
What is the deadweight loss due to monopoly now?
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