Suppose that a firm with market power can perfectly price-discriminate and faces the demand function q = 400- 4P. The firm's marginal costs are given by MC(q) = 2q +0.12q 2. If the firm cannot price-discriminate, the profit-maximizing level of output is 20.27, and the optimal price is $94.9325 Identify consumer surplus and producer surplus in the market when the firm cannot price discriminate, assuming that the firm maximizes profits. Calculate the deadweight loss from market power. Round your answers to two decimal places. consumer surplus: $______ producer surplus: $________ dead weight loss: $_____
Suppose that a firm with market power can perfectly price-discriminate and faces the demand function q = 400- 4P. The firm's marginal costs are given by MC(q) = 2q +0.12q 2. If the firm cannot price-discriminate, the profit-maximizing level of output is 20.27, and the optimal price is $94.9325 Identify consumer surplus and producer surplus in the market when the firm cannot price discriminate, assuming that the firm maximizes profits. Calculate the deadweight loss from market power. Round your answers to two decimal places. consumer surplus: $______ producer surplus: $________ dead weight loss: $_____
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter12: Price And Output Determination: Oligopoly
Section: Chapter Questions
Problem 3E
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Suppose that a firm with market power can perfectly
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consumer surplus: $______
producer surplus: $________
dead weight loss: $_____
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