Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A monopolist faces inverse demand p(Q) = 22 - 2Q and has total cost function TC(Q) 2Q. = a. Calculate the equilibrium price, quantity,

image text in transcribed

A monopolist faces inverse demand p(Q) = 22 - 2Q and has total cost function TC(Q) 2Q. = a. Calculate the equilibrium price, quantity, consumer surplus, and producer surplus if the monopolist must charge all consumers the same price. b. Suppose instead that the monopolist can perfectly price discriminate among consumers. What are the price, quantity, consumer surplus, and producer surplus now? c. Alternatively, the monopolist decides to charge a two-part tariff. What lump sum fee and price per unit should the monopolist charge if consumers are homogeneous?

Step by Step Solution

3.41 Rating (151 Votes )

There are 3 Steps involved in it

Step: 1

a To find the equilibrium price and quantity we need to set the marginal cost equal to the marginal revenue Given Inverse demand pQ 22 2Q Total cost TCQ 20 Marginal Revenue MR is the derivative of the ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of economics

Authors: N. Gregory Mankiw

6th Edition

978-0538453059, 9781435462120, 538453052, 1435462122, 978-0538453042

More Books

Students also viewed these Economics questions