Question

Monopoly so 1 Price 45+ 40+ 35 30+ in 15+ 10 MC-ATC Demand MR 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 Quantity

1. If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to _______________________________

2. If there are no fixed costs of production, monopoly profit without price discrimination equals _______________________________

3. If there are no fixed costs of production, monopoly profit with perfect price discrimination equals _______________________________

Answer 1

Answer
1)
zero
$0
===
The firm produces at MC=P when it discriminates price perfectly so there is no deadweight loss in the market as the firm is producing at a socially optimum level of output.
where
Q=500 and P=10

2)
The firm produces at MR=MC
where
Q=250 units
P=$22.5 from the demand curve at the output level
ATC=10
Economic profit =(P-ATC)*Q
=(22.5-10)*250
=3125
=======
3)
the profit is equal to consumer surplus as there is no consumer surplus because producer charge equal to a willingness to pay
CS=0.5*(Y-axis intercept of the demand curve -P)*Q
=0.5*(35-10)*500
=6250