Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer and explain these questions. thanks. AS.440.601 Mieroeconomic Theory Assignment 3 1. (100) Larry holds a monopoly in the market for pics, with no

please answer and explain these questions. thanks.

image text in transcribed
AS.440.601 Mieroeconomic Theory Assignment 3 1. (100) Larry holds a monopoly in the market for pics, with no xed costs and a constant marginal cost of c = 12. Moe. Curly. and Shemp are the three consumers who have the individual demand curve; (a) (11] {f} (g) (h) {i} 'IIlI'l = 2\" - :1 mild = 16 - {3 gram) = 12 f3 (10) Find the competitive equilibrium price p" and quantity rf. How many pics of does each consumer buy? (10] Find the surplus to consumers ('5' and producers 105'" in the competitive equilib- rium. How much surplus ('5: goes to each consumer? (10) Suppose that Larry must charge a single price for all pies. Find his monopoly price pm and quantity q'". How many pics 9:!" does each consumer buy? (10) Find the surplus to couslnners CS\" and producers PS'\" in the monopoly equi- librium. as well as the deadweiht lu'i Dll'L'". How much surplus C'Sf" goes to each consumer? (10) Suppose that Larry is a rst-degree price discriminator. who charges a different. price for each pie consumed. Find the quantity 9; as well as the surplus to consumers CS! and producers Psi. How much q} does each consumer buy and what surplus C5? does each receive? (10) Now suppose that Larry is a second-degree price discriminator who charges different. prices depending on the quantity sold. by implementing a two-part tariff T(q) = a. + pq. Calculate the parameters of the prot maximizing tariff a\" and p\". and the total quantity q\". How much q'i\" does each consumer buy. and what is the average price fag\" that each pays? (10) Find the surplus to consumers CS\" and producers PS\" under the two-part tariff, as well as the deadweight loss Dll'L\" . How much surplus CS,\" goes to each consumer? (10] Now suppose that Larry is a third-degree price discriminator who charges different prices to each consumer by segmenting the market. Suppose that Moe. Curl)". and Shemp prefer to eat apple. cherry. and pumpkin pies respectively. and that Larry can make each of these [or the same cost r- = 12. For each type of pie. find the price pf\" he charges and the quantity q!\" he sells. (10) Find the surplus to consumers CS!\" and producers PSI\" under market segmen- tation as well as the demlwcight loss Bil-'12\"! . How much surplus CHI-i\" goes to each consumer? (10) \"'hich of these equilibria are efcient? Which is best for the consumers. and which is best for the producer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Theories Of Value From Adam Smith To Piero Sraffa

Authors: Ajit Sinha

2nd Edition

0429807716, 9780429807718

More Books

Students also viewed these Economics questions