Econ 330

 

 

 

 

 

 

1. Assume that a monopolist has a demand curve given by P = 1500 -4Q, and TC = 100 + 5Q^2 with, MC = 10Q.

 

(a) If the firm charges a single price to everyone, how much profit does the firm make?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b) Use a graph to show whether this market is efficient.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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(c) If the firm could instead perfectly price discriminate, how much will the firm produce and what

are the firm's profits?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(d) Use a graph to show whether this market is efficient.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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2. Assume the market for cars is a duopoly, with a market demand curve given by P = 2500

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