Problem - A monopolist faces demand given by: P = 100 - .4QD , and has marginal costs given by: MC = 10 + .2Q.
a. Draw the demand, marginal revenue and marginal cost curves. Calculate and show how much this firm will sell and what they will charge.
b. Calculate the producer surplus with monopoly and the consumer surplus with monopoly.
c. How much would be produced if this was a competitive market? What would be the price?
d. Calculate the consumer and producer surplus for a competitive market.
e. Calculate the DWL of the monopoly (if any).