Question
Femando has a monopoly on sales of pizzas in the small town of North Key Largo, Florida. Use the following information on the demand
Femando has a monopoly on sales of pizzas in the small town of North Key Largo, Florida. Use the following information on the demand for Femando's pizzas to answer the questions: Price $30 Quantity Demanded 0 25 1 20 2 15 3 10 4 Points: 0.89 of 1 Price (dollars) $27.50 $25.00- $22.50 $2000- $17.50- $15.00 $12.50- Marginal Cost $0.00- Demand 1 Quantity of pizzas 5 0 5 6 If Fermando can produce pizzas at a constant cost of $5 per pizza, he will produce 3 pizzas, and charge $15 per pizza. He makes a profit of $ 30 If Fernando is able to engage in perfect price discrimination, his total revenue for 3 units will be $60. The marginal revenue of the third unit is $15. If Femando is able to engage in perfect price discrimination, he will produce 5 pizzas and his profit will be $ 50 Use the triangle or rectangle drawing tool to draw and label the areas showing producer surplus, consumer surplus, and deadweight loss, assuming Fernando does not price discriminate. Carefully follow the instructions above, and only draw the required objects. Use the triangle or rectangle drawing tool to draw and label the areas showing producer surplus, consumer surplus, and deadweight loss assuming he practices perfect price discrimination. Carefully follow the instructions above, and only draw the required objects. Price (dollars) $10.00 $7.50 $5.00- $2.50- $35.00- $32.50 $30.00 $27.50 $25.00 $22.50- $20.00 $17.50 $15.00 $12.50- $10.00- $7.50 $5.00- Marginal Cost $2.50- Demand $0.00 0 1 2 Quantity of pizzas G Q Save
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