Draw the graph showing producer equilibrium for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm).

Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. Identify the consumer surplus of the additional sales. What happens to the firm's profits as a result of the sale? Is price discrimination more allocatively efficient? Does price discrimination lead to a more efficient or less efficient outcome? Why or why not?

Using an appropriate diagram, explain why a major airline charges different prices for the same London-Heathrow to New York-JFK flight.