35. An amusement park faces a demand curve of Q = 40 - 0.4P and marginal...

  

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35. An amusement park faces a demand curve of Q = 40 - 0.4P and marginal cost of MC = 1.25Q, where Q is measured in thousands of customers. You may find it useful to draw a sketch of this market. Note that MC are increasing, not constant. a. Assume first that this is a perfectly competitive market, what is the competitive equilibrium (P and Q)? b. Calculate the consumer surplus and producer surplus if this is a perfectly competitive market? c. Now assume the amusement park is a monopolist. What is their profit maximizing level of output and what price do they charge? d. Calculate the consumer and producer surplus in this monopoly. How much is deadweight loss. 35. An amusement park faces a demand curve of Q = 40 - 0.4P and marginal cost of MC = 1.25Q, where Q is measured in thousands of customers. You may find it useful to draw a sketch of this market. Note that MC are increasing, not constant. a. Assume first that this is a perfectly competitive market, what is the competitive equilibrium (P and Q)? b. Calculate the consumer surplus and producer surplus if this is a perfectly competitive market? c. Now assume the amusement park is a monopolist. What is their profit maximizing level of output and what price do they charge? d. Calculate the consumer and producer surplus in this monopoly. How much is deadweight loss.