ECON302 - Intermediate Microeconomics - PROBLEM SET #2 Instructions: - DUE: Th Feb 22 at 5.00PM PT via Canvas. - Clearly identify the solution. Show your work. - You are encouraged to type your solutions. It is your responsibility to make sure that the solution is legible, correctly uploaded and viewable through the system. - You may discuss the problems with classmates but you are required to write down your own solutions. Problem 1. Consider a market with demand given by D(p) = 100 2p. Any firm in the market has the same cost function: TC(q) = + 10 1. Suppose the firm is a monopolist. What is the price per unit charged and quantity produced if the firm maximizes profits. . What is the profit of the firm? . What is the implied consumer surplus? . What is the implied producer surplus? U o= L N . What is the total/social surplus? Problem 2. Consider a market with demand given by D(p) = 100 2p. Any firm in the market has the same cost function: TC(q) = * + 10 1. Suppose the firm is now facing a perfectly competitive market. What is the price per unit charged and quantity produced if the firm maximizes profits. . What is the profit of the firm? . What is the implied consumer surplus? . What is the implied producer surplus? U o W N . What is the total/social surplus? Problem 3. Evaluate whether each of the following is smaller, equal or greater in the case where the firm is a monopoly v. the case where the firm is in a perfectly competitive market. 1. Marginal cost 2. Average cost . Total revenue . Price per unit . Quantity produced Consumer surplus Producer surplus N o oo w Total surplus