8. Can a monopolist that is not subject to any regulation lead the market to Pareto efficiency by his own initiative? Pareto efficiency is a situation that cannot be modified so as to make any one individual better off without making at least one individual worse off. In the model of monopoly, we assume that the ultimate goal of a monopolist is to maximize his profit, which means MC-MR. We have seen (for example, in the lecture or earlier problems, e.g., problem 5) that this equality leads the monopolist to produce less and charge a higher price than in perfect competition. This makes the monopolist better off but at the same time makes consumers worse off, as compared to perfect competition. This also leads to a deadweight loss. As we have the deadweight loss, the monopoly is definitely not Pareto efficient. See the lecture slide # 37. The transactions between Qm and Qk (quantities supplied in the monopoly and perfect competition, respectively) could take place to everyone's benefit, as the cost of the production is lower than the maximum willingness to pay of consumers for the good (given by the demand function). So we could think about improvement of the situation from the monopoly (making the transactions between Qm and Qk happen), but the monopolist will not do that by his own initiative because he produces so as to maximize his profit, so MR = MC.

The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly a. Place point Pi at the profit maximizing price and quantitvy assuming that the monopolist can only charge a single price. 100 95 90 85 80 75 70 65 2 60 b. What are the profits of the firm if it charges a single price? 50 45 Suppose the monopolist able to successfully price discriminate between two groups by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above? 35 30 25 20 15 10 MR 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity

5. Imagine a monopolist could charge a different price to every customer based on how much he or she was willing to pay. How would this affect monopoly profits?

What is the firm's profit?

Hello, I need help with this Econ question. I saw that these questions are already answered in bartleby

Explain whether the following sentence makes Good Economic Sense: “The way to tell if a business has monopoly power is to count the number of substitutes for that business’s product.”

Review the graph at right for a monopoly market (enter all of your responses as whole numbers). Price 100- How much is the consumer surplus? S 90- MC How much is the producer surplus? s 80- 70- How much is the deadweight loss? S 60 80- Monopoly total surplus is $ 50- Monopoly total surplus is V competitive total surplus. 40- 30- 20- 10- MR D 10 30 40 50 60 70 90 100 Quantity

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Provide an example of a cost function for which a natural monopoly exists. Why might we want to allow natural monopolies to exist (e.g. how might social welfare benefit from such a monopoly)?

Typed answer.