After all the unpleasant wars are apparently over, the blacksmiths of Westeros have become accustomed to dragons (over which Daenery's Targaryen has a monopoly) for all manner of fire-starting and smelting. This, however, leaves them hostage to Daenery's market power.

Specifically, the demand for dragon fire is: Q^D = 1,000 - 2P

Her total costs for feeding her dragon are TC = 50,000 and marginal costs are MC = 0

a)Graph this market, ensuring that your graph is consistent with the above info. Point out DWL, the efficient quantity as well as monopoly price and quantity.

b)What is the monopoly quantity and price? What about profits?

c)What is the socially efficient quantity? DWL?

d)If Daenerys's Targaryen knew how to perfectly price discriminate, what are producer and consumer surplus in this market?

Arya Stark successfully assassinates Daenerys, and dragons end up becoming commonplace. Others find that they are unskilled at controlling dragons so their total costs are: TC = 1,800 + 20q + 2q²

And marginal costs are: MC = 20 + 4q

Assume that the now competitive dragon market reaches a long run equilibrium.

e)Find the long-run price of dragon fire. How many suppliers are in this long-run equilibrium?