Topic 10 Monopoly

Question 1

revenue formula

Answer 1

p(q) x q price depends on quantity they desire to sell

Question 2

draw monopoly diagram

Answer 2

figure 10.3

Question 3

draw monopoly diagram and show dwl

Answer 3

figure 10.3 & 10.4

Question 4

perfect price discrimination

Answer 4

monopolist knows exactly how much each side hustle is willing to pay for each unit- charging exactly the first unit of consumer valuation resulting in no DWL but consumer surplus is 0

Question 5

why do monopolies exist

Answer 5

cost advantage
because of gov action:
selling licenses or rights to operating
barriers to entry
patents