A monopolist is selling products to a competitive buyer with the inverse demand P=120-20. The monopolist...
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A monopolist is selling products to a competitive buyer with the inverse demand P=120-20. The monopolist bears the total cost c(Q)=Q²/2 when producing Q units. (A) If the monopolist sells with the declining-block prices so that the buyer pays P for each unit of the quantity under Q units and P₂ ≤P for each additional unit over Q₁. Design the optimal P₁, P₂ and Q for the monopolist. (B) Find the amount of deadweight loss when the monopolist sells with the declining-block prices in question (A). A monopolist is selling products to a competitive buyer with the inverse demand P=120-20. The monopolist bears the total cost c(Q)=Q²/2 when producing Q units. (A) If the monopolist sells with the declining-block prices so that the buyer pays P for each unit of the quantity under Q units and P₂ ≤P for each additional unit over Q₁. Design the optimal P₁, P₂ and Q for the monopolist. (B) Find the amount of deadweight loss when the monopolist sells with the declining-block prices in question (A).
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Answer rating: 100% (QA)
A To find the optimal price and quantity for the monopolist selling with decliningblock prices we need to maximize the monopolists profit The monopoli... View the full answer
Related Book For
The Economics Of The Environment
ISBN: 9780321321664
1st Edition
Authors: Peter Berck, Gloria Helfand
Posted Date:
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