Question
(2) Suppose now that the monopolist engages in perfect (first degree) price discrimination. (a) What is the equilibrium price and quantity of the perfectly price
(2) Suppose now that the monopolist engages in perfect (first degree) price discrimination.
(a) What is the equilibrium price and quantity of the perfectly price discriminating monopolist. (b) What is the amount of consumer surplus. Compare the consumer surplus with that calculated under perfect competition and the single price monopoly.
(c) What is the amount of producer surplus. Compare the consumer surplus with that calculated under perfect competition and the single price monopoly.
(d) Calculate the amount of the deadweight loss. Compare the dead weight loss with that calculated under perfect competition and single price monopoly.
(e) Show the above answers graphically.
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