Reference no: EM13353125

Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD:

Demand: P=1000-10Q
Total Revenue: TR=1000Q-10QZ
Marginal Revenue: MR=1000-20Q
Marginal Cost: MC=100+10Q
Where Q indicates the number or copies sold and P is the price in Ectenian dollars.

a. Discover the value along with quantity that maximizes the company's profit.

b. Discover the value along with quantity that would maximize social welfare.

c. Compute the dead-weight failure from monopoly

d. Suppose, in additional to the costs above, the director of the film has to be paid. Company is considering 4 options:

i). A flat fee of 2,000 Ectenian dollars

ii). 50% of the profits.

iii). 150 Ectenian dollars per unit sold

iv). 50% of the revenue

for each option calculates the profit-maximizing price and quantity. Which, if any, of these compensation schemes would alter the deadweight loss from monopoly? Explain.