Economic surplus under monopoly also competition

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Reference no: EM1313215

Q. Suppose in the monopoly-versus-competition example in the text, where demand is Q= 100-P also MC=AC=$20, which MC under competition remains at $20. Explain however, suppose which the reason the monopoly can continue to be a monopoly is which it pays $10 per unit of output to reimburse lobbyists for their efforts in persuading legislators to the monopoly insulated from competition. For example, the lobbyists may be generating (false) studies which demonstrate which competition results in higher costs.

a. Calculate the price also quantities under monopoly also competition

b. Calculate total economic surplus under monopoly also competition. The difference is the social cost of monopoly

c. the social cost of monopoly can be disaggregated into two types of cost: resources cost of rent seeking also the usual deadweight loss of output restriction. Illustrate what are their magnitudes?

Reference no: EM1313215

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