The inverse demand curve is given by p(y) = 10- y, and a monopolist has a fixed
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Question:
The inverse demand curve is given by p(y) = 10- y, and a monopolist has a fixed supply of 4 units of a good available.
(a) How much will it sell and what price will it set?
b) What would be the price and output in a competitive market with these demand and supply characteristics?
(c) What would happen if the monopolist had 6 units of the good available? (Assume free disposal.)
(d) Compute the dead welfare loss due to monopoly
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