1. A monopolist serves market A with an inverse demand curve of P = 12 -...

1. A monopolist serves market A with an inverse demand curve of P = 12 - Q. Another monopolist serves market B with an inverse demand curve of P = 22 - 2Q. Suppose that both monopolists have a constant marginal cost of $2. What is the producer surplus earned by the monopolist serving market A?

2. A monopolist serves market A with an inverse demand curve of P = 12 - Q. Another monopolist serves market B with an inverse demand curve of P = 22 - 2Q. Suppose that both monopolists have a constant marginal cost of $2. What is the producer surplus earned by the monopolist serving market B?

3, A monopolist serves market A with an inverse demand curve of P = 12 - Q. Another monopolist serves market B with an inverse demand curve of P = 22 - 2Q. Suppose that both monopolists have a constant marginal cost of $2. Using your answers from the previous two questions, which producer surplus is higher (in market A or market B) and why?

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Rahul Sunny answered 1 year ago

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