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Suppose that a monopoly faces a demand curve P=30-2Q and its marginal cost curve is MC=Q .
(a) Plot the average revenue, marginal revenue and marginal cost curves for this monopoly.
(b) Find the profit maximizing price and output for this monopoly.
(c) Find the consumer surplus, the producer surplus, the total surplus and the deadweight loss in the (monopolized) market.
(d) Find the competitive price and quantity (as if the above marginal cost curve represents the market supply curve).
(e) Find the consumer surplus, the producer surplus and total surplus in the competitive market.
(f) Plot a graph on which you illustrate the monopoly equilibrium, the competitive equilibrium and the deadweight loss due to the monopoly.
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