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Suppose that a monopolist faces market demand of P = 400-2Q and a cost function of C = Q^2 + 100Q + 100. a)
Suppose that a monopolist faces market demand of P = 400-2Q and a cost function of C = Q^2 + 100Q + 100. a) On a well-labeled graph, show the marginal cost, average revenue, and marginal revenue in this market. b) What are the profit-maximizing price and quantity for the monopolist? c) Suppose that instead, the monopolist is able to use perfect price discrimination. What is the lowest price that the firm will sell at? d) Compare the consumer surplus, producer surplus and deadweight loss in parts b and c.
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