Use the following graph to answer the next 4 questions. The below graph shows the demand for Microsoft Word. The marginal cost of producing Microsoft Word is $0. P A) $0 B) $12 C) $24 D) $48 4 8 Q 1) Suppose Microsoft is engaged in perfect competition and has no market power. What is consumer surplus? 6 3 B) $12 C) $24 2) Suppose Microsoft has market power but is not able to price discriminate. What will Microsoft's profits be? A) $0 D) $48 3) Suppose Microsoft is able to price discriminate. What will Microsoft's profits be? A) $0 B) $12 C) $24 D) $48 4) Suppose Microsoft is able to price discriminate. Consumer surplus is A) $0; $0 B) $0; $12 C) 24; $12 and deadweight loss is
Use the following graph to answer the next 4 questions. The below graph shows the demand for Microsoft Word. The marginal cost of producing Microsoft Word is $0. P A) $0 B) $12 C) $24 D) $48 4 8 Q 1) Suppose Microsoft is engaged in perfect competition and has no market power. What is consumer surplus? 6 3 B) $12 C) $24 2) Suppose Microsoft has market power but is not able to price discriminate. What will Microsoft's profits be? A) $0 D) $48 3) Suppose Microsoft is able to price discriminate. What will Microsoft's profits be? A) $0 B) $12 C) $24 D) $48 4) Suppose Microsoft is able to price discriminate. Consumer surplus is A) $0; $0 B) $0; $12 C) 24; $12 and deadweight loss is
Chapter25: Monopoly
Section: Chapter Questions
Problem 7E
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Transcribed Image Text:Use the following graph to answer the next 4 questions. The below graph shows the demand for
Microsoft Word. The marginal cost of producing Microsoft Word is $0.
P
A) $0
B) $12
C) $24
4
8 Q
1) Suppose Microsoft is engaged in perfect competition and has no market power. What is consumer
surplus?
3
B) $12
C) $24
6
D) $48
2) Suppose Microsoft has market power but is not able to price discriminate. What will Microsoft's
profits be?
A) $0
D) $48
3) Suppose Microsoft is able to price discriminate. What will Microsoft's profits be?
A) $0
B) $12
C) $24
D) $48
4) Suppose Microsoft is able to price discriminate. Consumer surplus is
A) $0; $0
B) $0; $12
C) $24; $12
D) $12; $48
and deadweight loss is
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