Calculate the loss of economic welfare

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Reference no: EM13157714

A firm which holds an unregulated monopoly in the production of a good has the following production cost:

TC=100+50Q+0.25q^2 MC= 50 + 0.5Q Market Demand for this good is given by Q=200-0.5p

A) What quantity will this monopolistic choose to produce and at what price will they be sold? Is this price a "rip-off" for buyers?

B) Calculate the loss of economic welfare caused by the monopolistic . If some of this lost welfare would have been producer surplus, why is the monopolist willing to forgot this surplus?

C) Calculate the effiency of the monopoly outcome compared to a competitive market outcome.

Reference no: EM13157714

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