Question 1: Demand for washing machines in Australia in the 1950s was given by Q = 60-P, with total costs given by TC = 100 + 1OQ. i) If in the 1950s a monopoly was able to practice perfect price discrimination, how much would it produce? [4 marks] ii) If the government imposed a $10 tax per unit sold to the perfectly price discriminating monopoly. How much would it then produce? How much would the tax revenue be? [4 marks] iii) Perfect price discrimination is unlikely to happen in the market for washing machines. How many units would a single-price monopolist produce? What would be the single price charged by the monopolist? [4 marks]

Question 1: Demand for washing machines in Australia in the 1950s was given by Q = 60-P, with total costs given by TC = 100 + 1OQ. i) If in the 1950s a monopoly was able to practice perfect price discrimination, how much would it produce? [4 marks] ii) If the government imposed a $10 tax per unit sold to the perfectly price discriminating monopoly. How much would it then produce? How much would the tax revenue be? [4 marks] iii) Perfect price discrimination is unlikely to happen in the market for washing machines. How many units would a single-price monopolist produce? What would be the single price charged by the monopolist? [4 marks]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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