Question: could someone please write out the solution to all these parts? I did it but I got it wrong: The market demand for a good
could someone please write out the solution to all these parts? I did it but I got it wrong: The market demand for a good is known to be P Q and the marginal costaverage cost function is known to be P where P price and Q quantity.
a Find the marginal revenue function. Graph the demand function, marginal revenue function and the marginal costaverage cost function. Label the functions and the P and Q intercepts for the demand and marginal revenue functions.
b Find the price charged and quantity produced under perfect competition. Indicate these values in the graph.
c Find the price charged and quantity produced under monopoly. Indicate these values in the graph.
d Find the dollar amount of consumer surplus under monopoly. Find the dollar amount of consumer surplus under perfect competition.
e Find the dollar amount of deadweight loss under monopoly. Shade in the region of your graph that represents deadweight loss. Find the dollar amount of monopoly profit. Shade in region of your graph that represents monopoly profit. What is the profit level under perfect competition? Is there deadweight loss under perfect competition?
f From a social welfare standpoint, which is worse, the loss in consumer surplus due to monopoly profit or the loss in consumer surplus due to deadweight loss? Your answer should be just a
sentence or two.
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