Question
a momopolist faces an inerse demand given by P=1020-10Q where Q represents the quantity produced and sold of a particular good, which they sell at
a momopolist faces an inerse demand given by P=1020-10Q where Q represents the quantity produced and sold of a particular good, which they sell at the market price P. The monopolist cost function is given by C(Q)=10000 + 20Q Where Q is the quantity produced and C represents the cost in dollars. (A) [30P] Find the optimal price and quantity that the monopollist would chose under the assumption that their goal is to maximize profits. shows all of the steps required to arrive at the solution (b). [20P.] Compute the prots of this monopolist. Show all of the steps required to arrive at the solution. (c) [3UP] In a diagram with the market demand, identify the deadweight 10$ (DWL) arising from this monopoly (DWL shape depends on demand and cost functions so make sure your sketch resemble the shapes of the particular cost and demand functions in this problem) and then compute this amount. Hint: the size of a DWL is typically the area of some "triangle". Area of a triangle is just base*height. See sections 9.3 and 9.4 in the textbook. (d). [20P] now assume that this monopolist can use prefect price discrimination. find the quantity of goods that they sell and compute profits in this case.
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