A firm with market power faces the demand function q = 1,000 - 100P. The firm's marginal cost function is MC(q) = 2 + 0.08q.
a. If the firm behaves as a single-price monopoly, what are its optimal price and output?
b. If the firm behaves as a single-price monopoly, what are consumer surplus, producer surplus, and total surplus?
c. If the firm establishes a block-pricing structure with two prices, what prices will the firm use to maximize producer surplus?
d. If the firm establishes a block-pricing structure with two prices and maximizes producer surplus, what are consumer surplus, producer surplus, and total surplus?

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The Answer of A firm with market power faces the demand function q = 1,000 - 100P. The firm's marginal cost function is MC(q) = 2 + 0.08q.
a. If the firm behaves as a single-price monopoly, what are its optimal price and output?
b. If the firm behaves as a single-price monopoly, what are consumer surplus, producer surplus, and total surplus?
c. If the firm establishes a block-pricing structure with two prices, what prices will the firm use to maximize producer surplus?
d. If the firm establishes a block-pricing structure with two prices and maximizes producer surplus, what are consumer surplus, producer surplus, and total surplus?

A Firm with Market Power Faces the Demand Function Q