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Unformatted text preview: Econ 256 Intermediate Microeconomics Professor Ranganath Murthy Bucknell University, Summer 2005 PROBLEM SET 7 Due July 15, 2005 Solve the following problems. Graphs are required for Questions (1), (2), and (5). Please use the graph paper available at http://www.mathematicshelpcentral.com/graph_paper/files/Form4C.pdf , or you may use your own. Your graphs should be accurate . (1) The inverse demand equation facing the monopolist is P = 500 – 2 Q . Marginal Costs ( MC ) are constant at $100, and equal Average Costs ( AC ) as well. (a) If the monopolist charges a single ( uniform ) price , i.e., one price for all consumers for each unit sold, what are the following: the profitmaximizing quantity, the profit maximizing price, the maximum level of profit, the consumer surplus, the producer surplus, the total surplus or welfare, and the deadweight loss? (b) Suppose the monopolist now practices firstdegree or perfect price discrimination ....
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 Summer '05
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 Economics, Microeconomics, Supply And Demand, inverse demand, Cournot Equilibrium

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