A monopolist faces a demand curve, Q-100-2P and has a constant marginal cost of 10. It has no fixed costs. a. If the monopolist can only charge a single price, it should charge P and produce Q units. b. If the monopolist can charge a separate price for any units sold beyond Q", then the price of these additional units will lead to additional profit if it is any price in the range of A monopolist that charges a separate price for additional units is practicing price discrimination. c. Now suppose that the monopolist can perfectly price discriminate. What quantity will it produce? d. In terms of social welfare, total surplus will be highest in the pricing scheme described in part scheme described in part e. In terms of profitability, profit will be highest in the pricing scheme described in part described in part and lowest in the pricing and lowest in the priceing scheme

A monopolist faces a demand curve, Q-100-2P and has a constant marginal cost of 10. It has no fixed costs. a. If the monopolist can only charge a single price, it should charge P and produce Q units. b. If the monopolist can charge a separate price for any units sold beyond Q", then the price of these additional units will lead to additional profit if it is any price in the range of A monopolist that charges a separate price for additional units is practicing price discrimination. c. Now suppose that the monopolist can perfectly price discriminate. What quantity will it produce? d. In terms of social welfare, total surplus will be highest in the pricing scheme described in part scheme described in part e. In terms of profitability, profit will be highest in the pricing scheme described in part described in part and lowest in the pricing and lowest in the priceing scheme

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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