(28 points) Suppose a monopolist faces the following demand curve: P = 180 – 4Q. Also, the long run total cost of the monopolist is given by 40Q +1….

4. (28 points) Suppose a monopolist faces the following demand curve:P = 180 – 4Q. Also, the long run total cost of the monopolist is given by 40Q +1.5Q2. Therefore, long run marginal cost is 40 + 3Q.A) What is the monopolist’s profit maximizing level of output?B) What price will the profit maximizing monopolist charge?C) What would be the value of consumer surplus if the market were perfectly competitive? D) What is the value of producer surplus under perfect competition?E) What is the value of consumer surplus under monopoly?F) What is the value of producer surplus under monopoly?G) What is the value of the deadweight loss when the market is a monopoly?

Leave a comment

Your email address will not be published.