Identical self-service gasoline stations

Reference no: EM1312190

Suppose that in a city there are 100 identical self-service gasoline stations selling the same type of gasoline.

The total daily market demand function for gasoline in the market is QD=60,000-25,000P, where P is expressed in dollars per gallon.

The daily market supply curve is QS=25,000P for P$0.60.

1. How many gasoline stations would the monopolist operate?

2. Can we say that the monopoly leads to a less efficient use of resources than perfect competition? What is the amount of the deadweight loss, if any?

Reference no: EM1312190

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