A monopoly sells music CDs. It has constant marginal and average costs of $20. It faces two groups of potential customers: honest and dishonest people. The dishonest and the honest consumers' demand functions are the same: p=130-1Q. a. If it is not possible for the dishonest customers to pirate (steal) the music, what are the monopoly's profit-maximizing price and quantity? What is the deadweight loss? (round your answers to two decimal places) The equilibrium price is $ and the equilibrium quantity is units. The deadweight loss (DWL) is $.
A monopoly sells music CDs. It has constant marginal and average costs of $20. It faces two groups of potential customers: honest and dishonest people. The dishonest and the honest consumers' demand functions are the same: p=130-1Q. a. If it is not possible for the dishonest customers to pirate (steal) the music, what are the monopoly's profit-maximizing price and quantity? What is the deadweight loss? (round your answers to two decimal places) The equilibrium price is $ and the equilibrium quantity is units. The deadweight loss (DWL) is $.
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.6P
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Transcribed Image Text:A monopoly sells music CDs. It has constant marginal and average costs of $20. It faces two groups of potential customers: honest and dishonest people.
The dishonest and the honest consumers' demand functions are the same:
p=130-1Q.
a. If it is not possible for the dishonest customers to pirate (steal) the music, what are the monopoly's profit-maximizing price and quantity? What is the deadweight loss?
(round your answers to two decimal places)
The equilibrium price is $ and the equilibrium quantity is
units.
The deadweight loss (DWL) is $.
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