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Unformatted text preview: 4. Name three kinds of price discrimination. 5. Consider a monopolist with increasing returns to scale. (a) Graph the rms marginal and average cost if its cost function is C ( Q ) = F + cQ , where F and c are constants. (b) Add a demand curve to the same graph. Then indicate what quantities would i. Maximize the monpolists prot ii. Maximize total social surplus 1 iii. Give the largest social surplus, subject to the constraint that rm prots are positive 6. Write a short paragraph that agrees or disagrees with the following statement: In-creasing the length of patent protection is almost always good because it gives rms incentives to innovate. 2...
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- Fall '07