Question
If the firm facing the demand curve P = 10 - Q has zero marginal costs and is a perfect price discriminator instead of a
If the firm facing the demand curve P = 10 - Q has zero marginal costs and is a perfect price discriminator instead of a single price monopolist, and fixed costs are 12. What is the profit (loss) of the firm?What is the profit (loss) of the firm if this is a single priced firm and discrimination is not allowed? Show graphically why economists refer to single-price monopoly market structure as inefficient. Explain why price discrimination solves the welfare loss problem of monopoly, but then describe the downside of solving the welfare loss problem this way.
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