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What quantity will the monopoly produce

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Assignment:

Consider a monopoly firm selling small artificial Christmas trees. The demand function is given as:

P = 100 - 3Q

The marginal cost of production is constant and is given as:

MC = 4

Answer all the questions below. This is a multiple fill-in-the-blank question. All answers will be whole numbers.

What is the vertical intercept for the demand function?

Assume this monopoly is a single price monopoly.

  1. What quantity will the monopoly produce?
  2. What price will the monopoly charge per tree?
  3. How much consumer surplus (CS) is generated in this market?
  4. How much producer surplus (PS) is generated in this market?
  5. How much deadweight loss (DWL) exists in this monopoly market compared to if the market was perfectly competitive?

Now assume this monopoly engages in perfect price discrimination.

  1. What quantity will the monopoly produce?
  2. How much consumer surplus (CS) is generated in this market?
  3. How much producer surplus (PS) is generated in this market?
  4. How much deadweight loss (DWL) exists in this situation compared to if the market was perfectly competitive?

Reference no: EM133334951

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