Suppose a monopolist faces the following demand curve P 250

Suppose a monopolist faces the following demand curve:

P = 250 -2Q . Marginal cost of production is constant and equal to $10, and there are no fixed costs.

a) (2 points) What is the monopolists profit maximizing level of output?
b) (2 points) What price will the profit maximizing monopolist charge?
c) (2 points) How much profit will the monopolist make if she maximizes her profit?
d) (2 points) What is the value of consumer surplus?

e)How much consumer surplus would there be if this market was perfectly competitive?

f) (2 points) What is the value of the deadweight loss created by this monopoly?

Solution