Compare a situation of market competition, monopoly, and monopoly with first-degree price discrimination on a single...

 

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Compare a situation of market competition, monopoly, and monopoly with first-degree price discrimination on a single graph. Assume that the firms are maximizing profits. Assume that the supply curve for the competitors is the same as the marginal cost curve for the monopoly situations. Draw the Supply Curve (marginal cost curve) with an upward slope. For the three situations compare i. the price (or prices) charged consumers (3), ii. the quantity sold (3), iii. consumer surplus (3), iv. producer surplus (3), V. total gains from trade (3). vi. vii. In which situations will there be deadweight losses? (2) When comparing the single-price monopoly to the first-degree price discriminator, are there any consumers who are better off from the switch to first-degree price discrimination? (3) Compare a situation of market competition, monopoly, and monopoly with first-degree price discrimination on a single graph. Assume that the firms are maximizing profits. Assume that the supply curve for the competitors is the same as the marginal cost curve for the monopoly situations. Draw the Supply Curve (marginal cost curve) with an upward slope. For the three situations compare i. the price (or prices) charged consumers (3), ii. the quantity sold (3), iii. consumer surplus (3), iv. producer surplus (3), V. total gains from trade (3). vi. vii. In which situations will there be deadweight losses? (2) When comparing the single-price monopoly to the first-degree price discriminator, are there any consumers who are better off from the switch to first-degree price discrimination? (3)

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Lets break down the comparisons for each situation 1 Market Competition Price Determined by the intersection of the demand curve and the supply curve ... View the full answer