Consider the market for bicycles in the fictional province of Westvale. The market demand function for bicycles is given by P=300-2Q. The marginal cost curve for firms in this market is given by P=40+Q. Prices are measured in dollars. a) Under a competitive market equilibrium, what is the price of a bicycle? b) How many bicycles are produced under a competitive market equilibrium? c) Calculate consumer surplus, producer surplus, and total surplus under the competitive market equilibrium Suppose that the firms that were once competing in this market merge into one single firm, forming a monopoly. This monopoly has a marginal revenue function of P=300-4Q. d) What price does this monopolist charge? e) How many bicycles does the monopolist produce? f) Calculate consumer surplus, producer surplus, and total surplus under the monopolistic market outcome g) How much deadweight loss resulted from the creation of the monopolist?
Consider the market for bicycles in the fictional province of Westvale. The
a) Under a competitive
b) How many bicycles are produced under a competitive market equilibrium?
c) Calculate
Suppose that the firms that were once competing in this market merge into one single firm, forming a
d) What price does this monopolist charge?
e) How many bicycles does the monopolist produce?
f) Calculate consumer surplus, producer surplus, and total surplus under the monopolistic market outcome
g) How much
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