TECO602NA Final Exam Question.. Q Page 3 of 4 (iv) Local telephone calls (v ) Peanut butter (vi) Lipstick Question 4: (Total 8 marks) The Best Computer Company just developed a new computer chip, on which it immediately acquires a patent. The patent gives the company a monopoly. The diagram below shows the consumer surplus, producer surplus and total surplus in the market for this new chip. Marginal Cost Price, Cost, Revenue PM E C Demand \\Marginal Revenue QM Qc Quantity of Chips a) What happens to consumer surplus, producer surplus and total surplus, if the firm can perfectly price discriminate? (2+2+2 marks) b) What happened to the deadweight loss? (1 mark) c) What direction of transfers occurred? (1 mark) 3 1