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Suppose Googgle provides an operating system called Antruid and takes 100% of the market share. The average cost that Google bears is AC(Q) = Q

Suppose Googgle provides an operating system called Antruid and takes 100% of the market share. The average cost that Google bears is AC(Q) = Q 2 and the market demand is D(P) = 12 P.

(a) Illustrate the monopoly price and quantity on the Q-P plane.

(b) What are the monopoly price and quantity?

(c) What is the profit of Googgle and illustrate it on the graph.

(d) Find values of consumer and producer surplus. Illustrate each of them on the graph.

(e) What is the size of market inefficiency? What causes the welfare loss?

(f) What is the markup and allocation inefficiency?

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