Compare a situation of market competition, monopoly, and monopoly with first-degree price discrimination on a single graph. Assume that the firms are maximizing profits. Assume that the supply curve for the competitors is the same as the marginal cost curve for the monopoly situations.The demand curve is P = 200 - Q. The Supply curve for competitors is P = 2Q and the marginal cost (MC) curve for the monopolists is MC = 2Q. The total cost (TC) function is TC = Q2.Draw the Supply Curve (marginal cost curve) with an upward slope and put letters in for areas. For the three situations comparei. the price (or prices) charged consumers (8),ii. the quantity sold (4),iii. consumer surplus (8) iv. producer surplus (8),v. total gains from trade (4).vi. The size of the deadweight loss. (4)vii. When comparing the single- price monopoly to the first-degree price discriminator, are there any consumers who are better off from the switch to first-degree price discrimination? (4)
Compare a situation of market competition, monopoly, and monopoly with first-degree price discrimination on a single graph. Assume that the firms are maximizing profits. Assume that the supply curve for the competitors is the same as the marginal cost curve for the monopoly situations.The demand curve is P = 200 - Q. The Supply curve for competitors is P = 2Q and the marginal cost (MC) curve for the monopolists is MC = 2Q. The total cost (TC) function is TC = Q2.Draw the Supply Curve (marginal cost curve) with an upward slope and put letters in for areas. For the three situations comparei. the price (or prices) charged consumers (8),ii. the quantity sold (4),iii. consumer surplus (8) iv. producer surplus (8),v. total gains from trade (4).vi. The size of the deadweight loss. (4)vii. When comparing the single- price monopoly to the first-degree price discriminator, are there any consumers who are better off from the switch to first-degree price discrimination? (4)
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.1P
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Transcribed Image Text:Compare a situation of market competition, monopoly, and
monopoly with first-degree price discrimination on a single graph.
Assume that the firms are maximizing profits. Assume that the
supply curve for the competitors is the same as the marginal cost
curve for the monopoly situations.The demand curve is P = 200 - Q. The Supply curve for
competitors is P = 2Q and the marginal cost (MC) curve for the
monopolists is MC = 2Q. The total cost (TC) function is TC =
Q2.Draw the Supply Curve (marginal cost curve) with an upward slope
and put letters in for areas. For the three situations comparei. the price (or prices) charged
consumers (8),ii. the quantity sold (4),iii. consumer surplus (8) iv. producer surplus (8),v. total
gains from trade (4).vi. The size of the deadweight loss. (4)vii. When comparing the single-
price monopoly to the
first-degree price discriminator, are there any consumers who are
better off from the switch to first-degree price discrimination?
(4)
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