Question

depends on its ability to prevent buyers. pertectly competitive firms. Durable goods s may be constrained by markets for used may opt for different levels of quality than olies (firms with diminishing avate naturs broad range of output levels). The mechanisms adopted can affect the regulated firm. . Governments often choose t average costs goods type A monopoly may be able to increase its profits further discrimination- that is, charging differ of buyers. The ability through price ent prices to different price discrimination of the monopoly to practice PROBLEMS 74.1 4 monopolist can produce at constant average and marginal costs of AC MC 5. The firm faces a market given by Q 53-P a. Calculate the profit-maximizing price-quantity combination for the monopolist. Also calculate the b. What output level would be produced by this industry under perfect competition (where price- matprofits mon marginal cost) profts and the consumer surplus received in case (a). What is the value of the "deadweight loss" from te the consumer surplus obtained by consumers in case (b). Show that this exceeds the s sum of the monopolist m mon ation 14.2 A monopolist faces a market demand curve given by Q=70-p α. If the monopolist can produce at constant average and marginal costs of AC-MC-6, what output l olist choose to maximize profits? What is the price at this output level? What are the monopolist's profits b. Assume instead that the monopolist has a cost structure where total costs are described by C(Q) = 0.25Q' _ 5Q + 300.

answer 14.1, extra detail for c

Answer 1