What is consumer and producer surplus in this market

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Reference no: EM131161170

Need to solve this problem without using derivatives.

A monopolist has total cost TC = 200 + .5 Q2. Marginal cost is Q and the market demand is Q = 100 - P/2.

1) Draw a graph showing ATC, MgC, Demand, Mg Revenue and the optimal choice of the monopolist.

2) What is consumer and producer surplus in this market?

3) If this market were perfectly competitive (The market supply = MgCost). What would be consumer surplus and producer surplus?

4) What is the deadweight loss caused by this monopolist?

5) A tax of $.5 per unit is imposed on this monopolist, what is the increase in price that consumers should expect? (Hint: After the tax marginal cost is Q + .5)

Reference no: EM131161170

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