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Unformatted text preview: units, so marginal revenue is the price, not less than the price. Therefore, a perfectlydiscriminating monopolist is willing to sell all units for which the buyers valuation exceeds the monopolists marginal cost and achieves full efficiency. Chapter 11 5. (10 pts) Suppose the supply curve of boom box rentals on Golden State Park is given by P = 5 + 0.1 Q, where P is the daily rent per unit in dollars and Q is the number of units rented in hundreds per day. The demand curve for boom boxes is P = 20  0.2 Q. a. If each boom box imposes $3 per day in noise costs on others, by how much will the equilibrium number of boom boxes rented exceed the socially optimal number?...
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 Spring '08
 BRIGHTWELL
 Consumer Surplus, Producer Surplus

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