Econ201 Discusion #9 Mono PDF

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just some questions to help prep for exams...hope this helps anyone looking...

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DISCUSSION #9 Figure 1 – MONOPOLY COMPARED TO COMPETITION – A GRAPHICAL ILLUSTRATION P 90 b 75

c

65 d

Monopoly gain

MC

e f

a

DWL

g

10

MR 30

40

D Q

The above figure is identical to figure 1 in Supplementary Lecture II, only that in this figure, numbers are substituted for some letters. You may refer to the supplementary lecture II for response to these questions. Note responses are numerical. Formulas: The area of a triangle equals ½(height x base) and the area of a rectangle equals height x base. a.

What is Q under competition _____ and Q under monopoly? _______ (4 points)

b.

What’s consumer surplus (CS) under competition _____ and (CS) under monopoly _______ (4 points).

c.

What’s the monopoly gain? _________ (2 points)....