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Calculate the consumer and producer surplus

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Reference no: EM132098665

A monopoly faces a demand curve given by q(p) = p^(-e) . The firm has constant average and marginal cost c.

(a) How do you show that the elasticity of demand is always equal to e

(b) How do you find the profit maximizing price and quantity in terms of e (answer? p=(e/(1+e))c q=(ec/(1+e))^-e)

(c) How do you calculate the consumer and producer surplus

Reference no: EM132098665

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