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A monopolist faces an inverse demand curve, p(y) = 124 2y and has constant marginal costs of $24 and zero fixed costs. Assume the monopolist
A monopolist faces an inverse demand curve, p(y) = 124 2y and has constant marginal costs of $24 and zero fixed costs.
- Assume the monopolist is able to practice perfect price discrimination. How many units will it sell? What are its total profits?
- If the monopolist needs to price uniformly, how many units will it sell and at what price? What are its total profits?
- What is the deadweight loss in this market if the monopolist prices uniformly? What is the deadweight loss if it can practice perfect price discrimination?
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Economics of Strategy
Authors: David Besanko, David Dranove, Mark Shanley, Scott Schaefer
6th edition
978-1118273630, 111827363X, 978-1118319185
