7. Consider a monopoly that has the following information about its market and its cost curves where P is the price of the good and Q is the number of units of the good: Market Demand: Q = 1000 - 2P MC = 50 Fixed Cost for the Producer = 100 a. Given the above information, if this producer acts as a single price monopolist, calculate the following: Profit maximizing quantity = Profit maximizing price = Level of profits (remember you will need to adjust this to take into account FC) =__________________ Consumer Surplus = CS = Producer Surplus) = PS = _____________ Deadweight Loss = ________________ Show your work and provide a graph to illustrate your answer. b. Suppose that this monopolist decides to practice second degree price discrimination. The monopolist decides that it will sell its first 100 units of the good produced for a price of $450 per unit, its next 100 units for a price of $300 per unit, and a final 250 units at $275 per unit. Given this information and the initial information, calculate the following for the monopolist who practices this second degree price discrimination: Total quantity produced by the second degree price discriminator = Prices charged by the second degree price discriminator = Level of profits for the second degree price discriminator (remember you will need to adjust this to take into account FC) = Consumer Surplus in this case of second degree price discrimination = CS' = b. Producer Surplus in this case of second degree price discrimination = PS' = Deadweight Loss in this case of second degree price discrimination = Show your work and provide a graph to illustrate your answer. c. Compare your answers in (a) and (b). Does second degree price discrimination benefit consumers in this case? Explain your answer here and provide evidence to support your answer. Does second degree price discrimination benefit the producer? Explain your answer here and provide evidence to support your answer. d. Suppose this monopolist practices first degree price discrimination in this market. Compute the following if this monopolist successfully implements first degree price discrimination.

Total amount of the good produced in the market = PS" with perfect price discrimination = CS" with perfect price discrimination = ____________________ Profit for firm with perfect price discrimination (remember to account for fixed costs here) = ________________ DWL with perfect price discrimination = Show your work and provide a graph to illustrate your answer.