Question
Continue with your analysis of the monopoly cable-television company from Question 3, with demand of Q d = 30 - P/5 (alternatively, you can write
Continue with your analysis of the monopoly cable-television company from Question 3, with demand of Qd = 30 - P/5 (alternatively, you can write the demand equation as Qd = 30 - 0.2P) and MC = 5Q.
Reproduce the graph which shows your demand and marginal cost (MC) curves, as well as any other necessary curves.
Graphically indicate the socially optimal output level, Qsoc, and compute the quantity and price associated with this output.
Depict areas of consumer surplus (CS), producer surplus (PS), and any possible deadweight loss (DWL) associated with monopoly.(You do not need to determine the numerical size of CS, PS, and DWL, just show them graphically.)
Explain how you've determined the socially optimal output level. How does the socially optimal output compare to the monopolist output in terms of CS, PS, and DWL?
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