A monopolist in Ba can produce at constant marginal cost of MC = 10. The monopolist...

A monopolist in Ba can produce at constant marginal cost of MC = 10. The monopolist faces a market demand curve given by Q = 50 - P. You can assume that average cost is same as marginal cost.

a) Calculate the profit-maximizing price-quantity combination for the monopolist.

b) Compute the monopolist’s profits and consumer surplus.

c) What output level would be produced by this industry under perfect competition?

d) Calculate the consumer surplus obtained by consumers under perfect competition.

e) Compute the deadweight loss from monopoly.

Expert Solution

Ans.

Rahul Sunny answered 2 years ago

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