Suppose that the city has given Jorge a monopoly selling baseball caps at the local minor league stadium. Use the following graph to answer the questions.

a. What quantity will Jorge produce, and what price will he charge?
b. How much profit will Jorge earn?
c. Review the definition of allocatively efficiency. If Jorge produced at the allocatively efficient level of output, what quantity would he produce?
d. How much deadweight loss does Jorge create by acting like a monopolist rather than a perfect competitor? (Assume that the marginal cost curve is linear-a straight line-between the two relevant points.)

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Price and cost MC per unit $20 ATC 16 AVC 14 10 D. MR Quantity 15 20 25