For a monopolist with linear demand curve and constant marginal costs, show that the consumer surplus is equal to the DWL.

Consider a monopolist facing Demand, Marginal Costs, and Marginal Revenue as illustrated in the graph shown below. When this monopolist maximizes profit, Total Consumers' Surplus is equal to 38.75- 23.15 12.00 7.90 0 0 a b С areas a+b. zero. d 325 465 areas a+b+c+d+e. O areas c+d+e. 680 8 Marginal Revenue Marginal Costs of Production Demand 1,050 1,250 quantity

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

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Question 26 Figure 2 30 23 20 15 12 10 0 9 12 Quantity MR In order to maximize profits, the monopolist should produce how many units? Price MC ATC D

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The figure to the right shows the demand and cost curves facing a monopoly. In order t maximize its profit, the monopolist produces less units than the competitive market level of output. OA. 25 OB. 50 OC. 15 OD. 75 A D 400- 300- 200- 100- 0 25 D 75 50 MC - AC 100 Q

Suppose  that a monopolist has an inverse demand function given by P = 80 – 2Q. MC = 30. The entry fee under an optimal 2 part tariff is    A. 100   B. 625   C. 1250   D. 1500

1 Suppose that a monopolist has a patent for widgets and the market demand curve Q(P) is:Q(P) = 60 – 2P,where P is the price in dollars and Q is quantity. a. Solve for the inverse demand P(Q) curve by solving the demand curve for P in terms of Q. b. Using your answer from (a), express the monopolist’s total revenue in terms of Q as TR(Q) = QP(Q). c. Calculate the monopolist’s marginal revenue MR(Q) by differentiating the total revenue you found in theprevious step: MR(Q) = dTR(Q) / dQ. PLEASE SHOW ALL WORK