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QUESTION 3I 24 MARKSI (e) Determine how much of the consumer surplus transferred to the producers as profit. Suppose BABYCARE is a single price monopolist
QUESTION 3I 24 MARKSI (e) Determine how much of the consumer surplus transferred to the producers as profit. Suppose BABYCARE is a single price monopolist in the market for organic baby bath. Figure 1 shows the market situation of the firm. [5 Marks) (f) What will be the effect on profit, total surplus and consumer surplus...when this fimm apply perfect price discrimination? [3 Marks] Price 24 22 20 18 16 MO ATC 14 10 MR 20 40 60 80 100 120 140 Quantity (a) Determine the average fixed cost at the profit maximizing point. [3 Marks] (b) What is the efficient level of output? [3 Marks) (c) Calculate the consumer surplus at the efficient level of output. [5 Marks) Calculate the amount of consumer surplus that results in deadweight loss when a monopoly price is charge to consumers. QUESTION 5 [12 MARKS
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