HW2.pdf - ECON104B Intermediate Microeconomic Theory Spring 2019 University of California Riverside Homework 2 Due in the beginning of Lecture at 3:40

# HW2.pdf - ECON104B Intermediate Microeconomic Theory Spring...

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ECON104B: Intermediate Microeconomic Theory Spring 2019 University of California, Riverside Homework 2 : Due in the beginning of Lecture, at 3:40 pm, Tuesday, April, 23, 2019. Please answer the following questions. 1. Suppose the demand function is given by Q = 180 - 3 P , where Q is total quantity and P is market price. Further assume that MC = AC = 10 . Answer the following questions. (a) Find the profit-maximized price, P * , output quantity, Q * , and profit of the firm, π * , under perfect competition. (b) Find the profit-maximized price, P m , output quantity, Q m , and profit of the firm, π m , under monopoly. (c) Calculate the consumer surplus under the perfect competition and Monopoly and compare your results. What is the dead weight loss of the market due to monopoly? (d) Draw a graph with the demand curve, marginal cost curve, and marginal revenue curve to show how you find the monopoly price and quantity. Label the consumer surplus under monopoly,

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