3. A monopolist faces demand p(Q) = 65 - 2Q and has total cost TC (Q) = 100 +5Q+Q².a. Calculate price, quantity and (producer and consumer) surplus under perfectcompetition.b. Determine the profit-maximizing price, quantity, and profit for the monopolist.d.c. Calculate consumer surplus, producer surplus and deadweight loss under monopoly.How would a price ceiling of $27 affect price, quantity, producer and consumersurplus, and deadweight loss?

Note: “Since you have posted a question with multiple sub-parts, we will provide the solution only…

3. A monopolist faces demand p(Q) = 65 - 2Q and has total cost TC (Q) = 100 +5Q+Q². a. Calculate price, quantity and (producer and consumer) surplus under perfect competition. b. Determine the profit-maximizing price, quantity, and profit for the monopolist. c. Calculate consumer surplus, producer surplus and deadweight loss under monopoly. d. How would a price ceiling of $27 affect price, quantity, producer and consumer surplus, and deadweight loss?

3. A monopolist faces demand p(Q) = 65 - 2Q and has total cost TC (Q) = 100 +5Q+Q². a. Calculate price, quantity and (producer and consumer) surplus under perfect competition. b. Determine the profit-maximizing price, quantity, and profit for the monopolist. c. Calculate consumer surplus, producer surplus and deadweight loss under monopoly. d. How would a price ceiling of $27 affect price, quantity, producer and consumer surplus, and deadweight loss?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter25: Monopoly

Section: Chapter Questions

Problem 14E

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Question

3. A monopolist faces demand p(Q) = 65 - 2Q and has total cost TC (Q) = 100 +5Q+Q².
a. Calculate price, quantity and (producer and consumer) surplus under perfect
competition.
b. Determine the profit-maximizing price, quantity, and profit for the monopolist.
d.
c. Calculate consumer surplus, producer surplus and deadweight loss under monopoly.
How would a price ceiling of $27 affect price, quantity, producer and consumer
surplus, and deadweight loss?

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Step 3: Consumer and producer surplus in perfect competitve market:

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Step 5: Part c:

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Step 6: Determine DWL due to monopoly:

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