B. Quantitative Analysis(10 points)

Please read "Social Costs of Monopoly" and "Instructor's Notes" on Monopoly and Monopsony. Then complete the following problem.

Problem:Assume that the competitive market supply and market demand for unlimited monthly long-distance telephone service (in millions of customers) are given by the following equations:

Market supply curve: P_S= 10 + 0.25Q_S

Market demand curve: P_D= 85 - 0.5Q_D

a)Graph the supply curve, the demand curve and the marginal revenue curve using Excel document.

b)Calculate the consumer surplus and producer surplus at the competitive market equilibrium.

c)Calculate the consumer surplus and producer surplus when the unlimited monthly long-distance telephone service is run by a profit-maximizing monopolist.