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Retu H 13 points (Figure 1: Price-discriminating monopolist) Refer to the figure below which shows the behavior of a monopoly in two markets, A and

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Retu H 13 points (Figure 1: Price-discriminating monopolist) Refer to the figure below which shows the behavior of a monopoly in two markets, A and B. Refer to the figure for parts (a) through Market A Market B $20 $12 Co 4 CO AC = MC CO AC = MC 36 MR (a) How many units of output will the firm produce in Market A? What price will the monopolist charge in Market A? (b) How many units of output will the firm produce in Market B? What price will the monopolist charge in Market B? (c) How much consumer surplus is earned in Market A? How much profit is earned in Market A? (d) How much consumer surplus is earned in Market B? How much profit is earned in Market B? (e) In which market does the monopolist make the most profit? How much profit do they make in this market? In which market is there the most deadweight loss? How much deadweight loss is created in this market? (f) Suppose that due to some technological innovation, the monopolist is now able to gather perfect data on all of its customers. How would total profit, consumer surplus, and deadweight loss change if the monopolist begins to practice perfect price discrimination? BIUAA-I E X 1 Paragraph

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