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QUESTION
A monopolist faces a demand curve of Q = 100 P=2 and a total cost curve of T C = 640 + 40Q:
1. A monopolist faces a demand curve of Q = 100 P=2 and a total cost curve of T C = 640 + 40Q:
(a) Calculate the proÖt maximizing price and quantity [2 marks]
(b) What is the socially optimal (e¢ cient) P and Q? [2 marks]
(c) Calculate the DWL (dead weight loss). [2 marks]
