1. Warm Up Answer (orally) with your neighbor:
What are the characteristics of a perfectly competitive market?
Why is a perfectly competitive firm a “price taker”?
Why do perfectly competitive firms tend to make zero economic profit in the long run?
How do ALL firms determine how much output to produce?
Under what circumstances would a perfectly competitive firm continue to produce even despite making an economic loss? Why would it do this?
What’s the difference between a constant-cost and increasing cost industry?
What is productive efficiency?
What is allocative efficiency?
When are perfectly competitive firms productively efficient?
When are they allocatively efficient?

2. Review What are the characteristics of a perfectly competitive market?
Why is a perfectly competitive firm a “price taker”?
Why do perfectly competitive firms tend to make zero economic profit in the long run?
How do ALL firms determine how much output to produce?
Under what circumstances would a perfectly competitive firm continue to produce even despite making an economic loss? Why would it do this?
What’s the difference between a constant-cost and increasing cost industry?
What is productive efficiency?
What is allocative efficiency?
When are perfectly competitive firms productively efficient?
When are they allocatively efficient?

3. Monopoly 3

4. Characteristics of Monopolies4

5. 5 Characteristics of a Monopoly
Single Seller
One firm dominates the market
The firm IS the Industry
2. Unique good with no close substitutes
3. “Price Maker”
The firm can manipulate the price by changing the quantity it produces (i.e. shifting the supply curve to the left)
Ex: de Beers 5

6. 5 Characteristics of Monopoly
4. High Barriers to Entry
New firms can’t easily enter market
No immediate competitors
Firm CAN make profit in the long-run
5. Some “Nonprice” Competition
Despite having no close competitors, monopolies still advertise their products in an effort to increase demand. 6

7. Some Causes of Monopolies
Geography is the Barrier to Entry
Ex: Nowhere gas stations, Restaurants in airports and sports arenas
-Location or control of resources limits competition and leads to one supplier.
2. The Government is the Barrier to Entry
Ex: Patents, Comcast cable
-Government allows monopoly for public benefits or to stimulate innovation.
-The government issues patents to protect inventors and forbids others from using their invention. 7

8. Graphing Monopolies 8

9. Good news… Only one graph because the firm IS the industry.
The cost curves are the same
The MR= MC rule still applies 9

10. THE MARGINAL REVENUE DOESN’T EQUAL THE PRICE!
The Main Difference
Monopolies (and all Imperfectly competitive firms) face a downward sloping demand curve for their products.
To sell more a firm must lower its price.
This changes MR…
THE MARGINAL REVENUE DOESN’T EQUAL THE PRICE! 10

11. Why is MR less than Demand?P Qd TR MR
$11 - 11

12. Why is MR less than Demand?P Qd TR MR
$11 -
$10 1 10
$10 12

13. Why is MR less than Demand?P Qd TR MR
$11 -
$10 1 10 $9 2 18 8
$10 $9 $9 13

14. Why is MR less than Demand?P Qd TR MR
$11 -
$10 1 10 $9 2 18 8 $8 3 24 6
$10 $9 $9 $8 $8 $8 14

15. Why is MR less than Demand?P Qd TR MR
$11 -
$10 1 10 $9 2 18 8 $8 3 24 6 $7 4 28
$10 $9 $9 $8 $8 $8 $7 $7 $7 $7 15

16. Why is MR less than Demand?P Qd TR MR
$11 -
$10 1 10 $9 2 18 8 $8 3 24 6 $7 4 28 $6 5 30
$10 $9 $9 $8 $8 $8 $7 $7 $7 $7 $6 $6 $6 $6 $6 16

17. Why is MR less than Demand?P Qd TR MR
$11 -
$10 1 10 $9 2 18 8 $8 3 24 6 $7 4 28 $6 5 30 $5
$10 $9 $9 $8 $8 $8 $7 $7 $7 $7 $6 $6 $6 $6 $6 $5 $5 $5 $5 $5 $5 17

18. Why is MR less than Demand?P Qd TR MR
$11 -
$10 1 10 $9 2 18 8 $8 3 24 6 $7 4 28 $6 5 30 $5 $4 7 -2
$10 $9 $9 $8 $8 $8 $7 $7 $7 $7 $6 $6 $6 $6 $6 $5 $5 $5 $5 $5 $5 $4 $4 $4 $4 $4 $4 $4 18

19. Why is MR less than Demand?P Qd TR MR
$11 -
$10 1 10 $9 2 18 8 $8 3 24 6 $7 4 28 $6 5 30 $5 $4 7 -2
$10 $9 $9 $8 $8 $8 $7 $7 $7 $7 $6 $6 $6 $6 $6 $5 $5 $5 $5 $5 $5 $4 $4 $4 $4 $4 $4 $4 19

20. Why is MR less than Demand?P Qd TR MR
$11 -
$10 1 10 $9 2 18 8 $8 3 24 6 $7 4 28 $6 5 30 $5 $4 7 -2
$10 $9 $9
MR IS LESS THAN
PRICE $8 $8 $8 $7 $7 $7 $7 $6 $6 $6 $6 $6 $5 $5 $5 $5 $5 $5 $4 $4 $4 $4 $4 $4 $4 20

21. Calculating Marginal Revenue21

22. Does the Marginal Revenue equal the price?
To sell more a firm must lower its price. What happens to Marginal Revenue?
Price
Quantity
Demanded
Total Revenue
Marginal Revenue $6 $5 1 $4 2 $3 3 $2 4 $1 5
Does the Marginal Revenue equal the price? 22

23. Does the Marginal Revenue equal the price?
To sell more a firm must lower its price. What happens to Marginal Revenue?
Price
Quantity
Demanded
Total Revenue
Marginal Revenue $6 $5 1 5 $4 2 8 $3 3 9 $2 4 $1
Does the Marginal Revenue equal the price? 23

24. Draw Demand and Marginal Revenue Curves
To sell more a firm must lower its price. What happens to Marginal Revenue?
Price
Quantity
Demanded
Total Revenue
Marginal Revenue $6 - $5 1 5 $4 2 8 3 $3 9 $2 4 -1 $1 -3
MR DOESN’T
EQUAL PRICE
Draw Demand and Marginal Revenue Curves 24

25. Plot the Demand, Marginal Revenue, and Total Revenue Curves
$15 10 5 P Q TR
$64 40 20 Q 25

26. Demand and Marginal Revenue Curves
What happens to TR when MR hits zero?
$15 10 5 P D Q TR MR
$64 40 20
Total Revenue is at it’s peak when MR hits zero TR Q 26

27. Elastic vs. Inelastic Range of Demand Curve27

28. Elastic and Inelastic RangeP
Elastic
Inelastic
$15 10 5
Total Revenue Test
If price falls and TR increases then demand is elastic. D Q TR
A monopoly will only produce in the elastic range MR
$64 40 20
Total Revenue Test
If price falls and TR falls then demand is inelastic. TR Q 28

29. Maximizing Profit 29

30. MR = MC How much should this firm produce?
How much is the TR, TC and Profit or Loss? $9 8 7 6 5 4 3 2 P MC
ATC
Profit =$6 D MR Q 30

31. Conclusion: A monopolist produces where MR=MC, buts charges the price consumer are willing to pay identified by the demand curve. P MC
ATC 10 9 7 6 D 5 MR Q 31

32. What if costs are higher? How much is the TR, TC, and Profit or Loss?MC
$10 9 8 7 6 5 4 3 P
ATC
AVC D
TR= $90
TC= $100
Loss=$10 MR Q 32

33. Identify and Calculate:
TR=
TC=
Profit/Loss=
Profit/Loss per Unit=
$70
Identify and Calculate:
$56
$14 $2 P
$10 9 8 7 6 5 4 MC
ATC D MR Q 33

34. Warm Up:
Which of the following MUST be true of a monopolist’s profit-maximizing level of output?
Marginal revenue is equal to marginal cost, but greater than price
Marginal revenue is equal to marginal cost, but less than price
Marginal revenue is equal to both marginal cost and price
Average total cost is minimized
Average variable cost is minimized

35. Conclusion: A monopolist produces where MR=MC, buts charges the price consumer are willing to pay identified by the demand curve. P MC
ATC 10 9 7 6 D 5 MR Q 35

36. Warm Up:
Which of the following MUST be true of a monopolist’s profit-maximizing level of output?
Marginal revenue is equal to marginal cost, but greater than price
Marginal revenue is equal to marginal cost, but less than price
Marginal revenue is equal to both marginal cost and price
Average total cost is minimized
Average variable cost is minimized

37. Warm Up:
Which of the following MUST be true of a monopolist’s profit-maximizing level of output?
Marginal revenue is equal to marginal cost, but greater than price
Marginal revenue is equal to marginal cost, but less than price
Marginal revenue is equal to both marginal cost and price
Average total cost is minimized
Average variable cost is minimized

38. Warm Up:
Calculate Total Cost, Total Revenue, and Profit (or Loss) at the profit-maximizing quantity P MC
ATC 10 9 7 6 D 5 MR Q 38

39. Perfect Competition Quiz Answers!

40. 5. Which of the following indicates that a perfectly competitive firm is in long-run equilibrium?
Price equals marginal cost, which equals average variable cost.
Price equals average revenue, which equals marginal revenue
Price equals marginal cost, which equals average total cost.
Price equals average revenue, which equals marginal revenue.
Price equals average fixed cost.

41. 5. Which of the following indicates that a perfectly competitive firm is in long-run equilibrium?
Price equals marginal cost, which equals average variable cost.
Price equals average revenue, which equals marginal revenue
Price equals marginal cost, which equals average total cost.
Price equals average revenue, which equals marginal revenue.
Price equals average fixed cost.

42. Firm in Long-Run Equilibrium
Price = MC = Minimum ATC
Firm making a normal profit P MC
ATC
$15
MR=D
There is no incentive to enter or leave the industry
TC = TR 8 Q 42

43. 5. Which of the following indicates that a perfectly competitive firm is in long-run equilibrium?
Price equals marginal cost, which equals average variable cost.
Price equals average revenue, which equals marginal revenue
Price equals marginal cost, which equals average total cost.
Price equals average revenue, which equals marginal revenue.
Price equals average fixed cost.

44. 5. Which of the following indicates that a perfectly competitive firm is in long-run equilibrium?
Price equals marginal cost, which equals average variable cost.
Price equals average revenue, which equals marginal revenue
Price equals marginal cost, which equals average total cost.
Price equals average revenue, which equals marginal revenue.
Price equals average fixed cost.

45. 7. Which of the following statements about a constant-cost perfectly competitive industry in long-run equilibrium must be true? 
The long run supply curve is upward sloping
The long run supply is curve is perfectly inelastic
The total cost of production remains the same as output increases
An increase in demand will cause no change in the long run equilibrium price
An increase in demand will cause no change in the long run equilibrium quantity

46. Constant Cost vs. Increasing Cost Industries
Constant Cost Industry
In the long run, an increase in demand for the product won’t change the market price
Resources used to make the product are assumed to be unlimited and won’t get depleted by new firms entering the industry
Long run industry supply curve is horizontal
Increasing Cost Industry
In the long run, an increase in demand for the product will increase the market price
Resources used to make the product are limited
More firms entering the industry drive up resource prices – every firm’s long run average cost curve shifts upward
Long run industry supply curve is upward sloping

47. Constant Cost IndustryP
S (Long Run) Pe D D2 Qe Q2 Q

48. Firms enter to earn profit so supply increases in the industry
Price decreases and quantity increases P S P MC S1
ATC
$15
$15
MR=D
$10 D Q
5000
6000 8 Q
Industry
Firm 48

49. Firms enter to earn profit so supply increases in the industry
Price decreases and quantity increases P S P MC S1
ATC
$15
$15
MR=D
$10
$10
MR1=D1 D Q
5000
6000 5 8 Q
Industry
Firm 49

50. New Long Run Equilibrium at $10 Price
Zero Economic Profit P P MC S1
ATC
$10
$10
MR1=D1 D Q
5000
6000 5 Q
Industry
Firm 50

51. 7. Which of the following statements about a constant-cost perfectly competitive industry in long-run equilibrium must be true? 
The long run supply curve is upward sloping
The long run supply is curve is perfectly inelastic
The total cost of production remains the same as output increases
An increase in demand will cause no change in the long run equilibrium price
An increase in demand will cause no change in the long run equilibrium quantity

52. 7. Which of the following statements about a constant-cost perfectly competitive industry in long-run equilibrium must be true? 
The long run supply curve is upward sloping
The long run supply is curve is perfectly inelastic
The total cost of production remains the same as output increases
An increase in demand will cause no change in the long run equilibrium price
An increase in demand will cause no change in the long run equilibrium quantity

53. 6. For a perfectly competitive, increasing-cost industry, an increase in the industry’s demand will lead to which of the following in the long run?
An increase in each firm’s profit
A decrease in the price of an input and a decrease in total industry profits
A decrease in total industry sales
A decrease in total producer surplus and an increase in total consumer surplus
An upward shift in each firm’s long-run average cost curve

54. Individual Firm In Increasing Cost Industry
Costs
Long Run Average Cost Curve
, , ,000,0000
Quantity 54

55. Firms enter to earn profit so supply increases in the industry
Price decreases and quantity increases P S P MC S1
ATC
$15
$15
MR=D
$12 D Q
5000
6000 8 Q
Industry
Firm 55

56. Firms enter to earn profit so supply increases in the industry
Price decreases and quantity increases P S P MC S1
ATC
$15
$15
MR=D
$12
$12
MR1=D1 D Q
5000
6000 8 Q
Industry
Firm 56

57. Firms enter to earn profit so supply increases in the industry
Price decreases and quantity increases P S P MC S1
ATC
$15
$15
MR=D
$12
$12
MR1=D1 D Q
5000
6000 8 Q
Industry
Firm 57

58. Firms enter to earn profit so supply increases in the industry
Price decreases and quantity increases MC P S P S1
ATC
$15
$15
MR=D
$12
$12
MR1=D1 D Q
5000
6000 Q
Industry
Firm 58

59. New Long Run Equilibrium at $12 Price
Zero Economic Profit MC P P S1
ATC
MR=D
$12
$12 D Q
5000
6000 Q
Industry
Firm 59

60. Increasing Cost IndustryP
S (Long Run) P2 Pe D D2 Qe Q2 Q

61. 6. For a perfectly competitive, increasing-cost industry, an increase in the industry’s demand will lead to which of the following in the long run?
An increase in each firm’s profit
A decrease in the price of an input and a decrease in total industry profits
A decrease in total industry sales
A decrease in total producer surplus and an increase in total consumer surplus
An upward shift in each firm’s long-run average cost curve

62. 6. For a perfectly competitive, increasing-cost industry, an increase in the industry’s demand will lead to which of the following in the long run?
An increase in each firm’s profit
A decrease in the price of an input and a decrease in total industry profits
A decrease in total industry sales
A decrease in total producer surplus and an increase in total consumer surplus
An upward shift in each firm’s long-run average cost curve

63. 8. Which of the following statements is true about perfectly competitive firms?
They are always productively efficient in both the short run and the long run
They are always allocatively efficient in both the short run and the long run
They are only allocatively efficient in the long run, and only productively efficient in the short run
They are neither productively nor allocatively efficient in the long run
None of the above statements is true

64. Short-Run MC
ATC
D=MR
Profit
Price P Q
Quantity

65. Long-Run Equilibrium MC
ATC
Price
D=MR P Q
Quantity

66. 8. Which of the following statements is true about perfectly competitive firms?
They are always productively efficient in both the short run and the long run
They are always allocatively efficient in both the short run and the long run
They are only allocatively efficient in the long run, and only productively efficient in the short run
They are neither productively nor allocatively efficient in the long run
None of the above statements is true

67. 8. Which of the following statements is true about perfectly competitive firms?
They are always productively efficient in both the short run and the long run
They are always allocatively efficient in both the short run and the long run
They are only allocatively efficient in the long run, and only productively efficient in the short run
They are neither productively nor allocatively efficient in the long run
None of the above statements is true

68. Are Monopolies Efficient?68

69. Monopolies vs. Perfect Competition
S = MC P CS
In perfect competition, CS and PS are maximized.
Ppc PS D Q
Qpc 69

70. Monopolies vs. Perfect Competition
S = MC P
At MR=MC,
A monopolist will
produce less and
charge a higher price Pm
Ppc D MR Q Qm
Qpc 70

71. Monopolies vs. Perfect Competition
Where is CS and PS for a monopoly?
S = MC P CS
Total surplus falls.
Now there is DEADWEIGHT LOSS Pm PS
Monopolies underproduce and overcharge, decreasing CS and increasing PS. D MR Q Qm 71

72. Are Monopolies Productively Efficient?
No. They are not producing at the lowest cost (min ATC)
Does Q = Min ATC? $9 8 7 6 5 4 3 2 MC
ATC D MR Q 72

73. Monopolies are NOT efficient!
Are Monopolies Allocatively Efficient?
No. Price is greater. The monopoly is underproducing.
Does Price = MC? $9 8 7 6 5 4 3 2 P MC
ATC
Monopolies are NOT efficient! D MR Q 73

74. Because there is little external pressure to be efficient
Monopolies are inefficient because they…
Charge a higher price
Don’t produce enough
Not allocatively efficient
Produce at higher costs
Not productively efficient
Have little incentive to innovate
Why?
Because there is little external pressure to be efficient 74

75. Natural Monopoly
One firm can produce the socially optimal quantity at the lowest cost due to economies of scale. P
Theoretically, it’s better to have only one firm because of very high fixed costs MC
ATC MR D Q
Qsocially optimal 75

76. Regulating Monopolies76

77. Why Regulate? How do they regulate?
Why would the government regulate an monopoly?
To keep prices low
To make monopolies efficient
How do they regulate?
Use Price controls: Price Ceilings
Why don’t taxes work?
Taxes reduce supply and that’s the problem 77

78. Where should the government place the price ceiling?
1.Socially Optimal Price
P = MC (Allocative Efficiency) OR
2. Fair-Return Price (Break–Even)
P = ATC (Normal Profit) 78

79. Regulating Monopolies
Where does the firm produce if it is unregulated? P MC Pm
ATC D MR Q Qm 79

80. Regulating Monopolies
Price Ceiling at Socially Optimal
Socially Optimal = Allocative Efficiency P MC Pm
ATC
Pso D MR Q Qm
Qso 80

81. Regulating Monopolies
Price Ceiling at Fair Return
Fair Return means no economic profit P MC Pm
ATC
Pso
Pfr D MR Q Qm
Qso
Qfr 81

82. Regulating Monopolies
Unregulated
Socially Optimal P MC
Fair Return Pm
ATC
Pso
Pfr D MR Q Qm
Qso
Qfr 82

83. Regulating a Natural Monopoly
What happens if the government sets a price ceiling to get the socially optimal quantity? P
The firm would make a loss and would require a subsidy MC
ATC
Pso MR D Q
Qsocially optimal 83

84. Price Discrimination 84

85. Price Discrimination Definition:
Practice of selling the same products to different buyers at different prices
Examples:
Movie Theaters (student vs. reguar)
All Coupons (spenders vs. savers)
Ladies’ Night at bars 85

86. PRICE DISCRIMINATION Requires the following conditions:
Price discrimination seeks to charge each consumer what they are willing to pay in an effort to increase profits.
Those with inelastic demand are charged more than those with elastic
Requires the following conditions:
Must have monopoly power
Must be able to segregate the market
Consumers must NOT be able to resell product 86

87. P Qd TR MR
$11 - 87

88. Results of Price DiscriminationQd TR MR
$11 -
$10 1 10
$10 88

89. Results of Price DiscriminationQd TR MR
$11 -
$10 1 10 $9 2 19 9
$10
$10 $9 89

90. Results of Price DiscriminationQd TR MR
$11 -
$10 1 10 $9 2 19 9 $8 3 27 8
$10
$10 $9
$10 $9 $8 90

91. Results of Price DiscriminationQd TR MR
$11 -
$10 1 10 $9 2 19 9 $8 3 27 8 $7 4 34 7
$10
$10 $9
$10 $9 $8
$10 $9 $8 $7 91

92. Results of Price DiscriminationQd TR MR
$11 -
$10 1 10 $9 2 19 $8 3 27 $7 4 34 $6 5 40 $5 6 45 $4 7 49
$10
$10 $9
$10 $9 $8
$10 $9 $8 $7
$10 $9 $8 $7 $6
$10 $9 $8 $7 $6 $5
$10 $9 $8 $7 $6 $5 $4 92

93. WHEN PRICE DISCIMINATINGQd TR MR
$11 -
$10 1 10 $9 2 19 $8 3 27 $7 4 34 $6 5 40 $5 6 45 $4 7 49
$10
$10 $9
WHEN PRICE DISCIMINATING
MR = D
$10 $9 $8
$10 $9 $8 $7
$10 $9 $8 $7 $6
$10 $9 $8 $7 $6 $5
$10 $9 $8 $7 $6 $5 $4 93

94. Price Discriminating Monopoly
Regular Monopoly vs.
Price Discriminating Monopoly P MC Pm
ATC D MR Q Qm 94

95. Marginal Revenue = Demand
A perfectly discriminating monopolist can charge each person differently =>
Marginal Revenue = Demand P MC
ATC D MR Q 95

96. Identify the Price, Profit, CS, and DWL
A perfectly discriminating can charge each person differently so the Marginal Revenue = Demand
Identify the Price, Profit, CS, and DWL P MC
ATC D
=MR Q
Qnm 96

97. Identify the Price, Profit, CS, and DWL
A perfectly discriminating can charge each person differently so the Marginal Revenue = Demand
Identify the Price, Profit, CS, and DWL P MC
ATC
Many prices
More profit D
=MR
Price Discrimination results in several prices, more profit, no CS, and a higher socially optimal quantity Q
Qnm 97

98. How a Price Ceiling Affects MR
Suppose the Gov’t Imposes a Price Ceiling at the Socially Optimal Price P MC Pm
ATC
Pso D MR Q Qm
Qso 98

99. How a Price Ceiling Affects MR
How will this price ceiling affect the marginal revenue curve? P MC Pm
ATC
Pso D MR Q Qm
Qso 99

100. How a Price Ceiling Affects Marginal Revenue
AHHH IT SNAPPED IN HALF!!!! P MC Pm
ATC
Pso D MR Q Qm
Qso
100

101. What price should this firm charge to maximize profit?$8

102. (c) Assume that the monopolist is maximizing profit
(c) Assume that the monopolist is maximizing profit. Is allocative efficiency achieved? Explain.
NO!

103. (d) Between the prices of $16 and $18, is the monopolist in the elastic, inelastic, or unit elastic portion
of its demand curve? Explain.
inelastic

104. i. No!; ATC=P
ii. Yes!; 0 Economic Profit means positive accounting profit
(e) Assume that regulators set an output of 11 units.
(i) Is the monopolist earning positive economic profit? Explain.
(ii) Is the monopolist earning positive accounting profit?

105. Assume instead that regulators impose a price ceiling of $22.
(i) What is the marginal revenue for the eighth unit?
(ii) What quantity will be produced?

107. (g) Assume instead that the monopolist practices perfect price discrimination (also called first-degree price
discrimination).
(i) What quantity will be produced?
(ii) What will be the value of the consumer surplus?

108. (a) Using the numbers given in the graph, identify each of the following for the profit-maximizing monopolist.
(i) The quantity produced

109. (a) Using the numbers given in the graph, identify each of the following for the profit-maximizing monopolist.
(i) The quantity produced 4

110. (a) Using the numbers given in the graph, identify each of the following for the profit-maximizing monopolist.
(ii) the price

111. (a) Using the numbers given in the graph, identify each of the following for the profit-maximizing monopolist.
(ii) the price
$40

112. (a) Using the numbers given in the graph, identify each of the following for the profit-maximizing monopolist.
(iii) the allocatively efficient quantity

113. (a) Using the numbers given in the graph, identify each of the following for the profit-maximizing monopolist.
(iii) the allocatively efficient quantity 8

114. (b) At the profit-maximizing quantity from part (a)(i), is the monopolist experiencing economies of scale? Explain.

115. (b) At the profit-maximizing quantity from part (a)(i), is the monopolist experiencing economies of scale? Explain. No; Economies of Scale occurs when ATC declines as output increases – here, ATC is constant

116. (c) Now assume that the monopolist produces 10 units
(c) Now assume that the monopolist produces 10 units. Using the numbers given in the graph, calculate each of the following. Show your work.
(i) The monopolist’s economic profit

117. (c) Now assume that the monopolist produces 10 units
(c) Now assume that the monopolist produces 10 units. Using the numbers given in the graph, calculate each of the following. Show your work.
(i) The monopolist’s economic profit
Loss of $100

118. (c) Now assume that the monopolist produces 10 units
(c) Now assume that the monopolist produces 10 units. Using the numbers given in the graph, calculate each of the following. Show your work.
(ii) The consumer surplus

119. (c) Now assume that the monopolist produces 10 units
(c) Now assume that the monopolist produces 10 units. Using the numbers given in the graph, calculate each of the following. Show your work.
(ii) The consumer surplus
$250

120. (c) Now assume that the monopolist produces 10 units
(c) Now assume that the monopolist produces 10 units. Using the numbers given in the graph, calculate each of the following. Show your work.
(iii) The deadweight loss

121. (c) Now assume that the monopolist produces 10 units
(c) Now assume that the monopolist produces 10 units. Using the numbers given in the graph, calculate each of the following. Show your work.
(iii) The deadweight loss
None; the firm is producing more than the allocatively efficient quantity

122. (d) At what quantity is demand unit elastic?

123. (d) At what quantity is demand unit elastic?6

124. (e) Suppose the monopolist perfectly price discriminates and chooses the quantity that maximizes profit. Determine the dollar value of each of the following.
(i) The monopolist’s profit

125. (e) Suppose the monopolist perfectly price discriminates and chooses the quantity that maximizes profit. Determine the dollar value of each of the following.
(i) The monopolist’s profit
$160

126. (e) Suppose the monopolist perfectly price discriminates and chooses the quantity that maximizes profit. Determine the dollar value of each of the following.
(ii) The consumer surplus

127. (e) Suppose the monopolist perfectly price discriminates and chooses the quantity that maximizes profit. Determine the dollar value of each of the following.
(ii) The consumer surplus
None