Suppose a firm is a monopoly. Its marginal cost curve is flat, and its average cost curve is downward sloping (because it has a fixed cost). 1.) Using the point drawing tool, indicate the monopoly's profit-maximizing price and quantity in the figure if it cannot price discriminate. Label this point 'e..' 2.) Using the rectangle drawing tool, indicate the monopoly's losses at the no price discrimination profit-maximizing price and quantity. Label this rectangle 'Losses,." 3.) Using the point drawing tool, indicate the monopoly's profit-maximizing quantity in the figure if it perfectly price discriminates and the price charged for the last unit produced. Label this point 'e2. 4.) Using the triangle drawing tool, indicate the monopoly's producer surplus with perfect price discrimination. Label this triangle 'PS2. Carefully follow the instructions above, and only draw the required objects. price, $ per ticket AC MR Q. Tickets per concert DMC G

Suppose a firm is a monopoly. Its marginal cost curve is flat, and its average cost curve is downward sloping (because it has a fixed cost). 1.) Using the point drawing tool, indicate the monopoly's profit-maximizing price and quantity in the figure if it cannot price discriminate. Label this point 'e..' 2.) Using the rectangle drawing tool, indicate the monopoly's losses at the no price discrimination profit-maximizing price and quantity. Label this rectangle 'Losses,." 3.) Using the point drawing tool, indicate the monopoly's profit-maximizing quantity in the figure if it perfectly price discriminates and the price charged for the last unit produced. Label this point 'e2. 4.) Using the triangle drawing tool, indicate the monopoly's producer surplus with perfect price discrimination. Label this triangle 'PS2. Carefully follow the instructions above, and only draw the required objects. price, $ per ticket AC MR Q. Tickets per concert DMC G

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose a firm is a monopoly. Its marginal cost curve is flat, and its average cost curve is downward sloping (because it
has a fixed cost). 1.) Using the point drawing tool, indicate the monopoly's profit-maximizing price and quantity in the
figure if it cannot price discriminate. Label this point' e,. '2.) Using the rectangle drawing tool, indicate the monopoly's
losses at the no price discrimination profit-maximizing price and quantity. Label this rectangle 'Losses,. 3.) Using the
point drawing tool, indicate the monopoly's profit-maximizing quantity in the figure if it perfectly price discriminates and
the price charged for the last unit produced. Label this point' e2. '4.) Using the triangle drawing tool, indicate the
monopoly's producer surplus with perfect price discrimination. Label this triangle PS, . ' Carefully follow the instructions
above, and only draw the required objects.
2
Suppose a firm is a monopoly. Its marginal cost curve is flat, and its average cost
curve is downward sloping (because it has a fixed cost).
1.) Using the point drawing tool, indicate the monopoly's profit-maximizing price and
quantity in the figure if it cannot price discriminate. Label this point 'e₁.'
2.) Using the rectangle drawing tool, indicate the monopoly's losses at the no price
discrimination profit-maximizing price and quantity. Label this rectangle 'Losses,.'
3.) Using the point drawing tool, indicate the monopoly's profit-maximizing quantity in
the figure if it perfectly price discriminates and the price charged for the last unit
produced. Label this point 'e₂.'
4.) Using the triangle drawing tool, indicate the monopoly's producer surplus with
perfect price discrimination. Label this triangle 'PS2.
Carefully follow the instructions above, and only draw the required objects.
price, $ per ticket
MR
Q. Tickets per concert
AC
D
MC
Q
Q
G

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