Unformatted text preview: T ? What is the deadweight loss? (Hint: Follow the steps used in the exercise.) 2. Monopoly . Consider a monopolist with cost c ( q ) = 5 q 2 and a consumer with U ( m;q ) = m + 100 q ± 5 q 2 with income Y = 100. (a) Find the competitive allocation x ± . (Hint: Treat the situation as if the ±rm were a competitive ±rm.) (b) Find the monopolistic allocation x m . (c) What is the deadweight loss? 1...
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- Spring '08