George has a monopoly on burrito sales in a small town in Kansas. The burritos cost him a constant $5 each to produce. He faces following demand schedule for his product: Price Quantity Demanded $30 0 $25 1 $20 2 $15 3 $10 4 $5 5 $0 6 Under normal monopoly conditions,
George has a monopoly on burrito sales in a small town in Kansas. The burritos cost him a constant $5 each to produce. He faces following demand schedule for his product: Price Quantity Demanded $30 0 $25 1 $20 2 $15 3 $10 4 $5 5 $0 6 Under normal monopoly conditions,
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
- George has a
monopoly on burrito sales in a small town in Kansas. The burritos cost him a constant $5 each to produce. He faces followingdemand schedule for his product:
|
Quantity Demanded |
$30 |
0 |
$25 |
1 |
$20 |
2 |
$15 |
3 |
$10 |
4 |
$5 |
5 |
$0 |
6 |
Under normal monopoly conditions, how many burritos should he produce, what price should he charge, and how much profit can he expect to make?
- Draw a graph under these assumptions showing (and calculating)
producer surplus ,consumer surplus , economic surplus, anddeadweight loss .
If George could engage in perfect
- Draw a graph under these assumptions showing (and calculating) producer surplus, consumer surplus, economic surplus, and deadweight loss.
Is society better off by allowing George to perfectly price discriminate? Defend your answer.
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