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The inverse market demand in an industry is p = 15 - 2q. Firms in the industry use a technology with a fixed marginal cost.
The inverse market demand in an industry is p = 15 - 2q. Firms in the industry use a technology with a fixed marginal cost. A firm producing y units incurs a total cost of C(y) = 3y. Now suppose the industry is consolidated under a profit maximizing monopolist that uses the same production technology. In this case, what would be (1) The market price (2) the quantity sold (3) the consumer surplus? (4) the producer surplus (5) the dead-weight loss to the full efficiency?
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