Chapter 14, Problem 12PA

Subpart (a):

To determine

Graphical illustration of cost, demand, and marginal- revenue curves for the monopolist.

Subpart (b):

To determine

Show monopoly profit, consumer surplus, and area of deadweight loss in figure.

Subpart (c):

To determine

Monopoly profit.

Subpart (d):

To determine

Change in surplus.

Subpart (e):

To determine

Explain how would a monopolist make the decision whether to pay the fixed cost.

Subpart (f):

To determine

Explain whether the monopolist should price discriminate or not.

Subpart (g):

To determine

Explain how does the monopolist’s incentive to price discriminate differ from the social planner’s.(