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Suppose the inverse demand for a product produced by a single firm is given by P...

Suppose the inverse demand for a product produced by a single firm is given by P = 200 ? 5Q and that for this firm MC = 20 + 2Q.

a) ) If the firm cannot price-discriminate, what are the profit-maximizing price and level of output?

b) If the firm cannot price-discriminate, what are the levels of producer and consumer surplus in the market? What is the deadweight loss? Both compute and illustrate each on a graph.

c) If the firm has the ability to practice perfect price discrimination, what is the firm’s output?

d) If the firm practices perfect price discrimination, what are the levels of consumer and producer surplus? What is the deadweight loss from market power? Both compute and illustrate each on a graph.

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