(Type up your answer if you can, and keep it short!) 1. Suppression of Inventions This question came from a certain famous economist who passed away not too long ago: \"You are a monopolist of light bulbs, which now have a service life of 1,000 hours. Your R&D department discovers a way of doubling the service life, without any change in the cost of producing bulbs. If you, as a monopolist, fail to suppress the invention, What will be the price-quantity solution (assuming that consumers are fully informed about the improved quality) at the new equilibrium, ignoring transient states (e.g. consumers shifting from old bulbs to the new bulbs)? Will it pay to suppress the invention?\" [Hint: Consumers have a demand curve with quantity being hours of light] 2. Market Segmentation Suppose that Umbrella Ltd. faces market demand function (2\" = 100 10P Its total cost function is TC = 10 + 5Q. Umbrella Ltd. is a monopolist since it holds the patent on \"mobile rain avoidance devices\". a) How much will it choose to produce and what will be the market price for umbrellas? b) What is the consumer surplus in the case of monopoly? c) Suppose that the Umbrella Ltd. was able to perfectly price discriminate (charge a different price for each unit). What is producer and consumer surplus? d) Suppose that the market for umbrellas is composed of an island with two sides, a wet side and a dry side. Demand for umbrellas on the wet side is: QW\" = 50 2P While the demand on the dry side is: QM = 50 8P Umbrella Ltd. can price discriminate between these two markets. What will be the prices and quantities in the two markets? Why are these prices different