Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An organization has an inverse demand function for monthly consumption of Qd = 200 - 2P and a marginal and average cost of $10. Calculate

An organization has an inverse demand function for monthly consumption of Qd = 200 - 2P and a marginal and average cost of $10. Calculate producer surplus, consumer surplus, total surplus, economic profit, and deadweight loss in the following scenarios. Show your work for all calculations.

1. A monopolist under perfect price discrimination

2.A monopolist under single pricing.

3. A monopolist that can divide the market into two markets: those that value the product at or above $105 and those that value it less than $105.

4. Suppose that the company is regulated and required to provide minimum product quantities at marginal cost. If it helps, think of the demand curve as representing one consumer. The customer is charged marginal cost for the first 20 units used; the next 40 units at a price of $50; and the fee for any consumption above 60 is $130. How does the profitability compare to your answers in a through c?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

Business Driven Technology

Authors: Paige Baltzan

8th Edition

1259924920, 978-1259924927

More Books

Students also viewed these Economics questions

Question

2. Respect rules and constraints in your own behavior.

Answered: 1 week ago

Question

2. Find five metaphors for communication.

Answered: 1 week ago