Suppose that a monopolist faces an inverse demand curve given by P = 1500 - 2Q and a total cost curve given by TC = 500Q.

a.If the monopolist does not use price discrimination, then what is the equilibrium price and quantity set by the monopolist? What are consumer surplus, profit, and deadweight loss in this case?

b.What is the highest price that a consumer will pay if the monopolist uses perfect price discrimination (otherwise known as first-degree price discrimination), and what is the lowest price that a consumer will pay in this case? Explain.

c.If the monopolist has the ability to use perfect price discrimination, then is there a policy that ensures that consumers and the monopolist earn at least as much consumer surplus and profit as in (a) above? Explain.