Company Delta is a profit-maximizing monopolist currently earning normal profit.

a)Draw a correctly labeled graph for Company Delta. Label the axes and:

1. Profit-maximizing price (PE)
2. Profit-maximizing quantity (QE)
3. Socially optimal quantity (Qso)

b) Is this firm productively efficient? Explain.

c) Shade the area of deadweight loss.

d) Assume this monopolist became able to perfectly price discriminate. Identify if the following would increase, decrease, or remain constant:

1. The firm's profit-maximizing quantity of output
2. Deadweight loss

e) Company Delta hires in a perfectly competitive labor market. Draw a correctly labeled labor market graph, labeling the axes, equilibrium wage (We), and equilibrium quantity of labor employed (QE).

f) The government introduces a required licensing exam for the labor company Delta uses. Illustrate the effect of this new requirementonly on the graph from part (e).

g) Will the marginal revenue product of the last unit of labor employed increase, decrease, or stay the same?