Each province faces the same linear demand curve and a constant average cost. The Competition Bureau has reported that the industry is not a natural monopoly.

The government of Quebec chooses to run a public monopoly in producing the vaccines. It produces 20 million vaccines, which is sells at a price of $ 10 per unit.

In contrast, the government of Ontario decides to run a contested private monopoly that can engage in first-degree price discrimination as each customer reservation price is public knowledge. A report from the Canada revenue Agency has leaked that that the per vaccine cost in Ontario is $ 4 higher and the total produced vaccines are 18 million. Due to privacy legislation, a private monopoly is not obligated to disclose the pricing of its products.

a)Calculate the slope and the vertical intercept of the demand curve faced by each province.

b)Calculate the price(s) charged by the private monopolist in Ontario.

c)Briefly describe the economic intuition behind your result in part b).

d)Calculate the size of the social loss (DWL) from the monopoly in each province had they both faced Quebec's cost structure.

e)Calculate the producer surplus and consumer surplus in each province had they both faced Quebec's cost structure.

f)Based on your answers in parts d) and e), briefly conclude which type of monopoly generates a smaller social loss and which one generates a greater consumer surplus.

g)Draw a carefully-labeled graph that illustrates your answers from parts a) - e)