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There is only one bar in a small village. The inverse demand for pints of beer per night is given by p = 13 q/40;
There is only one bar in a small village. The inverse demand for pints of beer per night is given by p = 13 q/40; which gives a marginal revenue curve for the pub of p = 13 q/20. Suppose it costs the pub $3 per pint to serve beer. a) Draw an appropriate diagram to illustrate the situation. b) Calculate the price this (monopolist) pub charges per pint, and the number of pints sold per night. c) Show qualitatively (on your graph) and quantitatively (by the numbers) the Consumer Surplus, Producer Surplus, and any Deadweight Loss in this market.
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