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Purespring is the monopoly supplier of kombucha

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Reference no: EM133129507

Let the demand for kombucha be represented by the following demand curve: P = 400-10Q 

And suppose that PureSpring is the monopoly supplier of kombucha to Adelaide with a marginal cost curve: 

MC = 100

  1. On a clearly labeled diagram, sketch the demand, marginal revenue, and marginal cost curves and calculate and show the monopolist's profit-maximising quantity (QM), and the price that will be charged in the market (PM).
  2. If fixed cost is 100, what is the profit at the profit maximizing quantity (you don't have to draw this on the diagram). You must show your calculation method.
  3. Calculate the consumer surplus and producer surplus at the monopoly equilibrium and the deadweight loss of the monopoly outcome compared to the socially efficient quantity and show these on your diagram.

Reference no: EM133129507

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