Suppose a monopolist faces the following demand curve: p=250-2q Marginal cost of

Question

Suppose a monopolist faces the following demand curve:

p=250-2q

Marginal cost of production is constant and is $10, and there are no fixed costs.

What is the profit maximizing level of output?

What profit maximizing price wll be charged?

How much profit will be made if profit is maximized?

what would be the value of consumer surplus in the monopoly market?

What would be the value of consumer suprlus in a perfeclty competitive market?

What is the value of the deadweight loss when the market is a monopoly?

Explanation / Answer

profit maximizing level of output (q) = 60

profit maximizing price = 130

mAX profit = 7200

consumer surplus = 3600

consumer suprlus in a perfeclty competitive markeT = 14400

Deadweight loss = 3600

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