1.4.1 The following diagram illustrates the demand and marginal revenue curves facing a monopoly in an industry with no economies or diseconomies of scale. In the short and long run, MC = ATC.

a. Calculate the values of profit, consumer surplus, and deadweight loss, and illustrate these on the graph.

b. Repeat the calculations in part

a, but now assume the monopoly is able to practice perfect price discrimination.

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Dollars ($) 0 30 45 60 MC = ATC D Units of output, Q 300 600 1,200 MR