Unformatted text preview: d. No, we do not have allocative efficiency since we are not where the demand curve intersects the mc curve. That happens where P D = mc or at Q*=50. e. Dead-weight-loss is the area enclosed by the yellow marginal cost, purple series 5 and blue Demand. Its value is ½*25*250 = $3125. f. What type of barriers to entry story would be a plausible/reasonable explanation for the DeBeers monopoly? Input ownership. 2. See section 15.9 in the 6 th edition of the Varian text. Econ 313 - Wissink - Fall 2005 PS#6 – XtraQ - ANSWERS...
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- Fall '06
- Economics, 20 30 40, QSM, mc Series4 Series5, yellow marginal cost