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Suppose a monopolist faces consumer demand given by P= 600 – 10 with a constant marginal cost of $60 per unit (where marginal cost equals average total cost. assume the firm has no fixed costs). If the monopoly can only charge a single price, then it will earn profits of $ (Enter your response rounded as a whole number.) Correspondingly, consumer surplus is S However, if the firm were to practice price discrimination such that consumer surplus becomes profit, then, holding output constant at 270, the monopoly would have profits of S

Suppose a monopolist faces consumer demand given by P= 600 – 10 with a constant marginal cost of $60 per unit (where marginal cost equals average total cost. assume the firm has no fixed costs). If the monopoly can only charge a single price, then it will earn profits of $ (Enter your response rounded as a whole number.) Correspondingly, consumer surplus is S However, if the firm were to practice price discrimination such that consumer surplus becomes profit, then, holding output constant at 270, the monopoly would have profits of S

Microeconomic Theory
Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.6P
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Suppose a monopolist faces consumer demand given by P= 600 - 1Q with a constant marginal cost of $60 per unit (where marginal cost equals average total cost assume the firm has no fixed costs). If the monopoly can only charge a single price, then it will earn profits of S (Enter your response rounded as a whole number) Correspondingly, consumer surplus is S However, if the firm were to practice price discrimination such that consumer surplus becomes profit, then, holding output constant at 270, the monopoly would have profits of S
Transcribed Image Text:Suppose a monopolist faces consumer demand given by P= 600 - 1Q with a constant marginal cost of $60 per unit (where marginal cost equals average total cost assume the firm has no fixed costs). If the monopoly can only charge a single price, then it will earn profits of S (Enter your response rounded as a whole number) Correspondingly, consumer surplus is S However, if the firm were to practice price discrimination such that consumer surplus becomes profit, then, holding output constant at 270, the monopoly would have profits of S
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