Economics Consider the following cost function faced by the monopolist: TC(q)= 2q2+20q+10. The demand faced by the monopolist is the following: p(q)=200-10q, where q denotes quantity and p denotes price. Find the price and quantity that maximizes profit of the monopolist. If the monopolist becomes a perfectly price discriminating monopolist, calculate the Consumer Surplus and Producer Surplus.

Economics Consider the following cost function faced by the monopolist: TC(q)= 2q2+20q+10. The demand faced by the monopolist is the following: p(q)=200-10q, where q denotes quantity and p denotes price. Find the price and quantity that maximizes profit of the monopolist. If the monopolist becomes a perfectly price discriminating monopolist, calculate the Consumer Surplus and Producer Surplus.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter9: Monopoly

Section: Chapter Questions

Problem 7SQ

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Economics

Consider the following cost function faced by the monopolist: TC(q)= 2q²+20q+10. The demand faced by the monopolist is the following: p(q)=200-10q, where q denotes quantity and p denotes price.

1. Find the price and quantity that maximizes profit of the monopolist.
2. If the monopolist becomes a perfectly price discriminating monopolist, calculate the Consumer Surplus and Producer Surplus.

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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ISBN:

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Tucker, Irvin B.

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