Monopoly (4 problems)

With the help of diagrams answer the following:

a) Compare price and output in a perfectly competitive firm and in a monopoly

b) Illustrate the transfer of consumer's surplus from a perfectly competitive industry to a monopoly

c) Highlight the inefficiency prevalence in a single-price monopoly.

A theme park that has a capacity to hold 60,000 people on any particular day is facing dwindling sales. It has therefore decided to launch on a sales promotion venture to attract University students by using

third degree price discrimination. Assume the demand for the recreational services of the park for boys and girls can be represented by:

Qb/6000 + Pb = 8

Qg/6000 + P, = 6

What should they charge the girls and boys, respectively. (Hint: MR in the two markets must be equal.)

Suppose a pure monopolist is faced with the demand schedule shown in table 1, and the cost data as shown in table 2. Calculate the missing total-revenue and marginal-revenue amounts, and determine the profit maximizing price and profit-earning output for this monopolist. What is the monopolist's profit? Verify your answer graphically and by comparing total revenue and total cost.

Suppose a pure monopolist is faced with the demand schedule shown in table 1, and the cost data as shown in table 2. Calculate the missing total-revenue and marginal-revenue amounts, and determine the profit maximizing price and profit-earning output for this monopolist. What is the monopolist's profit? Verify your answer graphically and by comparing total revenue and total cost.