Question
Note ...The answer should be typed. A monopolist's total costs are given by ()=20+10+2 and she faces the demand curve =200-2. a. What output will
Note ...The answer should be typed.
A monopolist's total costs are given by ()=20+10+2 and she faces the demand curve =200-2. a. What output will the monopolist sell, and at what price? b. Calculate the monopolist's profits. c. What output level, if produced, would maximize social surplus? d. Calculate the deadweight loss due to this monopoly. e. At the output chosen by the monopolist i. What is the price elasticity of demand? ii. What is the marginal revenue? f. Suppose instead that the demand curve was =5-8 i. Verify that the industry is a natural monopoly (demand intersects (), while () is falling). ii. What output will the monopolist sell? iii. What is the efficient output level (i.e. social surplus maximizing)? iv. If we forced the monopolist to produce the efficient output level, how much subsidy would we need to provide the monopolist so they break even? SOLVE ONLY QUESTION (F) AND ITS FOLLOWING PARTS