Compute the resulting dead weight loss

Assignment Help Business Economics

Reference no: EM1347475

DIRECTIONS: Please read the following problem set carefully (10 points)

• CONSIDER:

o A single firm in a market who sells a product for which there is no close substitute.

o HIGH barriers to enter the market exist

o INVERSE-MARKET DEMAND for the good:

o FIRM'S COST FUNCTION for the good:

1) The Socially Optimal Output Quantity & Price. (HINT: What a perfectly competitive firm's equilibrium would be)

2) The Monopoly's Optimal Output Quantity & Price.

3) Compute the resulting dead weight loss (DWL) inefficiency from the monopolistic optimal outcome.

Reference no: EM1347475

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