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What is the quantity of ads that Facebook sells?

What is the quantity of ads that Facebook sells?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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What is the deadweight loss, if Facebook acts as a single-price monopolist? In reality, Facebook charges different companies different amounts for ad campaigns, often systematically lowering the price of the ad campaign until the firm purchases. If Facebook is able to perfectly price discriminate, how many ad campaigns will it sell? If Facebook perfectly price discriminates, what will the consumer surplus be? If Facebook perfectly price discriminates, what will the deadweight loss be?
Transcribed Image Text:What is the deadweight loss, if Facebook acts as a single-price monopolist? In reality, Facebook charges different companies different amounts for ad campaigns, often systematically lowering the price of the ad campaign until the firm purchases. If Facebook is able to perfectly price discriminate, how many ad campaigns will it sell? If Facebook perfectly price discriminates, what will the consumer surplus be? If Facebook perfectly price discriminates, what will the deadweight loss be?
Facebook is the biggest seller of advertising space in the social media market (Instagram is also a major seller, but it is owned by Facebook). Assume that Facebook is a monopolist and is illustrated by the graph below. Use the below graph for #9 - 16. P ($) 18 17 16 15 14 |1, 14.0 13 12 11 10 7 ATC 34, 1.4 4 |16, 1.8 D 3 31, 1.4 17, 1.8 2 MC 1 567 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Q (millions) -1 0 1 2 3 -2 15, 1.9 MR -3 What is the quantity of ads that Facebook sells?
Transcribed Image Text:Facebook is the biggest seller of advertising space in the social media market (Instagram is also a major seller, but it is owned by Facebook). Assume that Facebook is a monopolist and is illustrated by the graph below. Use the below graph for #9 - 16. P ($) 18 17 16 15 14 |1, 14.0 13 12 11 10 7 ATC 34, 1.4 4 |16, 1.8 D 3 31, 1.4 17, 1.8 2 MC 1 567 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Q (millions) -1 0 1 2 3 -2 15, 1.9 MR -3 What is the quantity of ads that Facebook sells?
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