A single price monopolist has a cost function of c(Q) = 10 + Q, where Q is output. It facesthe following demand curve: Q°(p) = 0, if p > 24 and Q°(p) = 120/p, if p s 24.What is the profit-maximizing choice of output?The profit maximizing choice of output is =At this optimum level of output, calculate the consumer surplus. In addition, by drawinga graph, show the area representing the producer surplus (label it by PS) and the area representing thedeadweight loss (label it by DWL). Calculate the values of producer surplus and deadweight loss.

cost function of c(Q) = 10+ Q D(p) = 0, if p > 24 D(p) = 120/p, if p ≤ 20

Answered: A single price monopolist has a cost…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A single price monopolist has a cost function of c(Q) = 10 + Q, where Q is output. It faces the following demand curve: Q (p) = 0, if p> 24 and Q°(p) = 120/p, if ps 24. What is the profit-maximizing choice of output? The profit maximizing choice of output is =