Suppose the market is monopoly. The market demand function is Q subscript d equals 60 -...

Suppose the market is monopoly. The market demand function is Q subscript d equals 60 - 0.5 P, where p is the price. The firm has no fixed cost, and the marginal cost MC = 30. a. Write down the marginal revenue of this firm. b. Calculate the profit-maximizing monopolistic price and quantity. c. Calculate the profit of the firm. d. Calculate consumer surplus. After selling the products to the consumers in question (a)-(b), there are still other consumers in the market willing to buy this product at lower price. This firm is able to do price discrimination in the secondary market. e. Write down the demand function and marginal revenue in the secondary market. f. Calculate the price and quantity in the secondary market. g. Calculate the profit of the firm in the secondary market. h. Calculate consumer surplus in the secondary market. i. Show that the welfare loss is less when the firm is able to do price discrimination. You need to calculate the welfare loss before and after the price discrimination respectively. j. Calculate the price elasticity of demand in the first market and in the secondary market.

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Rahul Sunny answered 1 month ago

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