If the monopoly could have perfectly price discriminate, the monopoly will maximized total surplus. O True False

Illustrate a so-called natural monopoly in a figure and explain with the help of the figure the problem of producing the socio- economically optimal quantity. Assume that the marginal cost is constant.

Please no written by hand solutions 1. Assume the cost function for a monopolist is given by TC(q) = 30Q; the inverse demand function for the firms' output is p = 120 - Q, where Q is the total output. a. Find the profit-maximizing combination of price and quantity b. Estimate consumer surplus, producer surplus and the deadweight loss associated with this monopolist C. If this industry became perfectly competitive, explain and estimate the consumer surplus, producer surplus and deadweight loss of the industry d. Graph your answers for a, b, and c 2. Now assume that the monopolist above splits into two. Each of two firms has the cost function TC(q) = 30q. a. What are the firms' outputs in a Nash equilibrium of Cournot's model? b. Estimate the economic profits for each firm c. If firm 1 is the leader and firm 2 the follower, find the equilibrium outputs for the Stackelberg solution.

The quantity sold by a monopolist using first degree price discrimination is higher than the quantity sold by a monopolist who cannot price discriminate. O True O False

Monopoly ceases if the demand for the good is Little flexibility. O O not flexible. Flexibility equivalent. O flexible.

The inefficiency of the monopoly lies in the higher output that it sells and the lower price that it charges for its commodity. O True O False

3. a. State the conditions needed for price discrimination?

Question 30 Demand: P=120-Q Marginal Revenue: MR=120-2Q Total Cost: TC=Q² Marginal Cost: MC=2Q For this monopolist, the profit-maximizing price is and the profit-maximizing quantity is 90, 30 30, 90 40, 80 None of these answers O O O

Tecky Corp is a monopoly in the market of product Y. Suppose you are the marketing manager of Tecky Corp. You have gathered some information about product Y and the cost of Tecky Corp. as shown in the table below. Total cost $ Unit Price $ Total revenue $ Quantity 300 1 680 680 430 560 1,120 592 440 1,320 3 792 4 370 1,480 1,024 1,400 280 1,304 1,260 210 1,626 1,050 150 2,025 100 800 2,432 You are in a meeting with the CEO of Tecky Corp. The CEO asks the following question A. during the meeting: "We should be able to get more revenue as we sell more units. I see the total revenue rises from the quantity of 1 to 4. However, why does the total revenue start falling from the quantity of 5 onward?" Explain to the CEO why this is the case.

18   Is is true that the more responsive the quantity demanded to its price is, the more market power the firm has?