Suppose that a Monopolist has no fixed costs and a fixed Marginal Cost equal to $4 per unit. This monopolist also faces the demand: Q = 28-p 5. [3 points] If this monopolist is a single-price monopolist, then what price would it charge and what Quantity would it produce? What would be the Consumer Surplus (CS), Producer Surplus (PS), and Total Surplus (TS) in the single-price case? Now suppose that this firm can first-degree price discriminate. 6. [2 points] What would be the Consumer Surplus (CS), Producer Surplus (PS), and Total Surplus (TS) in the case where this monopolist can first-degree price discriminate? Now suppose that this firm cannot first-degree price discriminate, but can instead second-degree price discriminate. Now suppose that this monopolist offers the menu of: 12 units for p = $16 • 18 units for p = $10 7. [2 points] Will the above make consumers better off? Will it make firms better off? Now suppose that this monopolist continues to second-degree price discriminate, but offers the a different menu of: ⚫ 9 units for p = $19 • 14 units for p = $14 8. [3 points] What is the new Consumer Surplus (CS), Producer Surplus (PS), and Total Surplus (TS) in this second-degree price discrimination case?
Suppose that a Monopolist has no fixed costs and a fixed Marginal Cost equal to $4 per unit. This monopolist also faces the demand: Q = 28-p 5. [3 points] If this monopolist is a single-price monopolist, then what price would it charge and what Quantity would it produce? What would be the Consumer Surplus (CS), Producer Surplus (PS), and Total Surplus (TS) in the single-price case? Now suppose that this firm can first-degree price discriminate. 6. [2 points] What would be the Consumer Surplus (CS), Producer Surplus (PS), and Total Surplus (TS) in the case where this monopolist can first-degree price discriminate? Now suppose that this firm cannot first-degree price discriminate, but can instead second-degree price discriminate. Now suppose that this monopolist offers the menu of: 12 units for p = $16 • 18 units for p = $10 7. [2 points] Will the above make consumers better off? Will it make firms better off? Now suppose that this monopolist continues to second-degree price discriminate, but offers the a different menu of: ⚫ 9 units for p = $19 • 14 units for p = $14 8. [3 points] What is the new Consumer Surplus (CS), Producer Surplus (PS), and Total Surplus (TS) in this second-degree price discrimination case?
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.6P
Related questions
Question
![Suppose that a Monopolist has no fixed costs and a fixed Marginal Cost equal to $4 per unit. This
monopolist also faces the demand:
Q = 28-p
5. [3 points] If this monopolist is a single-price monopolist, then what price would it charge
and what Quantity would it produce? What would be the Consumer Surplus (CS),
Producer Surplus (PS), and Total Surplus (TS) in the single-price case?
Now suppose that this firm can first-degree price discriminate.
6. [2 points] What would be the Consumer Surplus (CS), Producer Surplus (PS), and Total
Surplus (TS) in the case where this monopolist can first-degree price discriminate?
Now suppose that this firm cannot first-degree price discriminate, but can instead second-degree
price discriminate. Now suppose that this monopolist offers the menu of:
12 units for p = $16
• 18 units for p = $10
7. [2 points] Will the above make consumers better off? Will it make firms better off?
Now suppose that this monopolist continues to second-degree price discriminate, but offers the
a different menu of:
⚫ 9 units for p = $19
• 14 units for p = $14
8. [3 points] What is the new Consumer Surplus (CS), Producer Surplus (PS), and Total
Surplus (TS) in this second-degree price discrimination case?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F89c5a593-d93b-4074-bd97-e89bfb57a867%2Ff1fc14bf-d0d9-47fc-af71-fb8846195d4f%2Fey45e0m_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose that a Monopolist has no fixed costs and a fixed Marginal Cost equal to $4 per unit. This
monopolist also faces the demand:
Q = 28-p
5. [3 points] If this monopolist is a single-price monopolist, then what price would it charge
and what Quantity would it produce? What would be the Consumer Surplus (CS),
Producer Surplus (PS), and Total Surplus (TS) in the single-price case?
Now suppose that this firm can first-degree price discriminate.
6. [2 points] What would be the Consumer Surplus (CS), Producer Surplus (PS), and Total
Surplus (TS) in the case where this monopolist can first-degree price discriminate?
Now suppose that this firm cannot first-degree price discriminate, but can instead second-degree
price discriminate. Now suppose that this monopolist offers the menu of:
12 units for p = $16
• 18 units for p = $10
7. [2 points] Will the above make consumers better off? Will it make firms better off?
Now suppose that this monopolist continues to second-degree price discriminate, but offers the
a different menu of:
⚫ 9 units for p = $19
• 14 units for p = $14
8. [3 points] What is the new Consumer Surplus (CS), Producer Surplus (PS), and Total
Surplus (TS) in this second-degree price discrimination case?
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