QUESTION 1 A monopolist faces a demand curve, Q=100-2P and has a constant marginal cost of 10. It has no fixed costs. and produce Q= a. If the monopolist can only charge a single price, it should charge P*= : units. b. If the monopolist can charge a separate price for any units sold beyond Q", then the price of these additional units will lead to additional profit if it is any price in the range of A monopolist that charges a separate price for additional units is practicing price discrimination. c. Now suppose that the monopolist can perfectly price discriminate. What quantity will it produce? d. In terms of social welfare, total surplus will be highest in the pricing scheme described in part scheme described in part e. In terms of profitability, profit will be highest in the pricing scheme described in part described in part and lowest in the pricing and lowest in the priceing scheme

QUESTION 1 A monopolist faces a demand curve, Q=100-2P and has a constant marginal cost of 10. It has no fixed costs. and produce Q= a. If the monopolist can only charge a single price, it should charge P*= : units. b. If the monopolist can charge a separate price for any units sold beyond Q", then the price of these additional units will lead to additional profit if it is any price in the range of A monopolist that charges a separate price for additional units is practicing price discrimination. c. Now suppose that the monopolist can perfectly price discriminate. What quantity will it produce? d. In terms of social welfare, total surplus will be highest in the pricing scheme described in part scheme described in part e. In terms of profitability, profit will be highest in the pricing scheme described in part described in part and lowest in the pricing and lowest in the priceing scheme

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.1P

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QUESTION 1 A monopolist faces a demand curve, Q-100-2P and has a constant marginal cost of 10. It has no fixed costs. a. If the monopolist can only charge a single price, it should charge P*= and produce Q units. b. If the monopolist can charge a separate price for any units sold beyond Q", then the price of these additional units will lead to additional profit if it is any price in the range of A monopolist that charges a separate price for additional units is practicing price discrimination. c. Now suppose that the monopolist can perfectly price discriminate. What quantity will it produce? d. In terms of social welfare, total surplus will be highest in the pricing scheme described in part scheme described in part e. In terms of profitability, profit will be highest in the pricing scheme described in part described in part and lowest in the pricing and lowest in the priceing scheme
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A monopolist has the demand and marginal cost as shown in the table below. There is no fixed cost in the production. Quantity Marginal Cost 2 Price 10 1 9. 2 3 8 3 4 7 4 5 5 (i) If the monopolist practices single pricing, determine the price, quantity, and profit of the monopolist. Explain how the quantity is determined. (ii) If the monopolist practices perfect price discrimination, determine the price, quantity and profit in the market.
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