Identify the consumer surplus of the additional sales

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Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm).

Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity.

Identify the consumer surplus of the additional sales. What happens to the firm’s profits?

Does price discrimination lead to a more efficient or less efficient outcome? Why or why not?

Reference no: EM131378512

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