Question: A firm s total cost function is TC = 8 Q . The market demand function is Q = 2 0 0 . 5 P
A firms total cost function is TC Q
The market demand function is Q P
a If the firm uses a singlepricing strategy:
What are the firms profitmaximizing output QS and price PS
Determine the consumer surplus CS producer surplus PS total
surplus TS and deadweight loss DWL
b If the firm uses a perfect price discrimination:
What is the firms profitmaximizing output QD
Determine the consumer surplus CS producer surplus PS total
surplus TS and deadweight loss DWL
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
