CH10.2

typing is prefered than hand-writing.

2. Rich Uncle Pennybags is the only seller of board games in Atlantic City, New Jersey. The inverse demand curve for board games is given by P = 40 _ 0-5Q, where Q is in hundreds of games per month. Rich Uncle Pennybags' marginal cost of producing board games is 7 + 0. 1 Q . a. If Rich Uncle Pennybags cannot price discriminate, What is his prot-maximizing level of output? What is his prot maximizing price? b. How much consumer surplus will buyers of board games receive? How much producer surplus will end up in Uncle Pennybags' pockets? How much deadweight loss is created by the board game monopoly? c. Suppose Uncle Pennybags is a magnicent salesman, able to discern perfectly his customers' willingness to pay. If he leverages this information to begin perfectly price discriminating, how many board games will he sell? (1. How much surplus will buyers receive from a perfectly price discriminating Uncle Pennybags? How much producer surplus will Uncle Pennybags capture? What will the deadweight loss due to monopoly be