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Social ScienceThe figure below shows the market for one hour of economics tutoring at your college. Imagine that the market for economics tutoring couldbe perfectly competitive, controlled by a monopolist who charges a single price or a monopolist who charges each customer a different price. Use theinformation in the diagram to answer the questions below.Price$100$60MC$20MRQuantity200100SUBMIT ANSWE03.17 >9 OF 17 QUESTIONS COMPLETEDMacBook Pro
How much is total surplus if the market is perfectly competitive?
How much is total surplus if the market is controlled by a single price monopolist?
Suppose the single price monopolist started charging all customers the maximum price they are willing to pay. How much additional surplus is created?
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The figure below shows the market for one hour of economics tutoring at your college. Imagine that the market for economics tutoring could be perfectly competitive, controlled by a monopolist who charges a single price or a monopolist who charges each customer a different price. Use the information in the diagram to answer the questions below. Price $100 $60 MC $20 MR Quantity 200 100 SUBMIT ANSWE 03.17 > 9 OF 17 QUESTIONS COMPLETED MacBook Pro
Expert Answer
Given that
Maximum price is $100
Minimum price is $20
Monopolist equilibrium price is $60
Monopolist equilibrium quantity is 100
Perfect competitive market equilibrium quantity is 200
Known Facts:
Monopolist equilibrium point:
The monopolist equilibrium point will occur at where the marginal revenue and marginal cost intersect each other.
Perfect competition equilibrium point:
Perfect competition equilibrium point will occur at where the marginal cost and demand curve intersect each other.
Formula Used:
Part 1:
Find the Consumer surplus and Producer surplus for Prefect competi...
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