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Unformatted text preview: Blue-book – 25 out of 50 pts. (2 qns., 12 pts. each + 1) Answer these questions in your blue-book. Show your work and intermediate steps for partial credit. Points are split equally across all sub-parts. Your score will only be based on the marks in your blue-book. You will not receive any credit for anything written on your exam paper. You will receive 1 extra point for correctly writing your name, perm number, version (A,B,C, or D), and TA’s name on your blue-book. 1. A monopolist sells exclusively to Freya, whose demand is given by p = 15- 2 q and has MC = q (and no fixed cost). (a) Find the profit maximizing price, p , and quantity, q . Answer : p = 9 and q = 3 (b) What are the monopolists profits, the consumer surplus, and the deadweight loss? Answer : π = 22 . 5, CS = 9, and DWL = 6 (c) If the monopolist used a two-part tariff, instead of a uniform price, what would be the optimal per-unit price, p , fee, f , and quantity, q ....
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This note was uploaded on 05/08/2011 for the course ECON 100B taught by Professor Kilenthong during the Spring '08 term at UCSB.
- Spring '08