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Economics 1st Edition by Dean Karlan,Jonathan Morduch
Edition 1ISBN: 978-0073511498Economics 1st Edition by Dean Karlan,Jonathan Morduch
Edition 1ISBN: 978-0073511498 Exercise 1
Figure 14P-1 presents the demand curve, marginal revenue, and marginal costs facing a monopolist producer.
a. What is the profit-maximizing level of output?
b. What price will the monopolist charge for the quantity in part a?
c. What are the efficiency costs (deadweight loss) of monopoly output/pricing? Provide a numerical answer and illustrate this area on the graph.
d. What is consumer surplus under monopoly output/pricing? Illustrate this area on the graph.
e. What is the loss of consumer surplus under monopoly outcomes versus efficient outcomes? Provide a numerical answer.
a. What is the profit-maximizing level of output?
b. What price will the monopolist charge for the quantity in part a?
c. What are the efficiency costs (deadweight loss) of monopoly output/pricing? Provide a numerical answer and illustrate this area on the graph.
d. What is consumer surplus under monopoly output/pricing? Illustrate this area on the graph.
e. What is the loss of consumer surplus under monopoly outcomes versus efficient outcomes? Provide a numerical answer.
Explanation
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Diagram:
Figure -1 illustrates the cons...
Economics 1st Edition by Dean Karlan,Jonathan Morduch
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