Problem 1. Market demand is P = 100-0.25Q, where Q is the total quantity demanded by consumers. Monopoly's costs are C = 10Q + 0.125Q~
Problem 1. Market demand is P = 100-0.25Q, where Q is the total quantity demanded by consumers. Monopoly's costs are C = 10Q + 0.125Q~ +40. a) Calculate prices and quantities if the monopoly uses block pricing with two prices. Calculate CS, DWL and firm's profit and demonstrate on a diagram. b ) Find firm's output and profit if the firm engages in perfect price discrimination. Show on a diagram
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