Problem 1 Consider the market for high speed internet in Illinois. The market demand and the...

 

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Problem 1 Consider the market for high speed internet in Illinois. The market demand and the marginal cost are given by the following equations: Demand: P = 4200-3Q Marginal cost: MC-600+6Q a. (8 points) What would the equilibrium price and quantity for this good be if this market were. perfectly competitive? Find the consumer surplus, producer surplus, and total surplus. b. (8 points) What would the equilibrium price and quantity for this good be if this market were controlled by one producer (monopoly)? c. (6 points) Use your answer for part (b) and find consumer surplus, producer surplus, total surplus, and the deadweight loss from the monopolization of this market. Which market structure do consumers prefer? Monopoly or perfectly competitive market? Explain! Problem 1 Consider the market for high speed internet in Illinois. The market demand and the marginal cost are given by the following equations: Demand: P = 4200-3Q Marginal cost: MC-600+6Q a. (8 points) What would the equilibrium price and quantity for this good be if this market were. perfectly competitive? Find the consumer surplus, producer surplus, and total surplus. b. (8 points) What would the equilibrium price and quantity for this good be if this market were controlled by one producer (monopoly)? c. (6 points) Use your answer for part (b) and find consumer surplus, producer surplus, total surplus, and the deadweight loss from the monopolization of this market. Which market structure do consumers prefer? Monopoly or perfectly competitive market? Explain!

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Answer Explanation i When there is monopoly in market then there is same Eq... View the full answer