Producer surplus and deadweight loss under monopoly pricing

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Suppose a firm faces the inverse demand curve P = 100 – Q. Marginal cost is constant at $10.

a. Calculate producer surplus and the deadweight loss under monopoly pricing.

b. Suppose the firm uses block pricing, selling the first 45 units at $55 per unit, the next 20 units at $35 per unit, and the next 20 units at $15 per unit. Calculate producer surplus and the deadweight loss under block pricing.

Reference no: EM13995806

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