Monopoly Part a 1. Monopoly and price discrimination: (a) What is the profit maximization condition for a (single-price) monopolist in the short-run? How about in the long-run? Is it efficient to have monopoly in the society? Why or why not? When does the government allow monopoly? (b) If a monopolist is allowed to price-discriminate, what are the three broad categories of discrimination? Explain each one of them with example. 2. A monopolist faces the following demand curve: P = 1200 - 8Q, its total cost is given by: TC = 20000 + 2Q2. (a) If it is a single price monopolist, what is its profit maximizing price and quantity? How much is the profit? How much are consumer surplus, producer surplus and dead-weight loss? Compare these to the efficient outcome where the social surplus is maximized. (b) Suppose it is a first degree price discriminator instead of a single price monopolist. What is the lowest price that the monopolist will charge? How much will be the profit (loss) of the firm? How much are consumer surplus, producer surplus and dead-weight loss? Compare these to the efficient outcome