Question

ec172sp2020hw10.pdf Note: Staple your assignment together before handing it in, otherwise you will not receive credit. 1. Widgets are produced by a monopolist. The cost of producing widgets is given by the following cost function C(q) = 2q^2 The inverse demand function for widgets is given by P = 120 - q where P is the price per widget and q is the quantity of widgets. a. Suppose the widget monopolist must charge the same price for every widget (i.e. the widget producer is a single price monopolist). How many widgets will she produce and what price will she charge per widget to maximize her profits? Compute her profits. b. Suppose the widget monopolist can charge a different price for every widget (i.e. the widget producer can engage in perfect price discrimination). How many widgets will she sell and how much profit will she earn. c. Rank the outcomes in (a) and (b) in terms of the widget producer's profits as well as in terms of economic efficiency (i.e. welfare).

          ec172sp2020hw10.pdf
Note: Staple your assignment together before handing it in, otherwise you will not
receive credit.
1. Widgets are produced by a monopolist. The cost of producing widgets is given by
the following cost function
C(q) = 2q^2
The inverse demand function for widgets is given by P = 120 - q where P is the price
per widget and q is the quantity of widgets.
a. Suppose the widget monopolist must charge the same price for every widget (i.e.
the widget producer is a single price monopolist). How many widgets will she
produce and what price will she charge per widget to maximize her profits?
Compute her profits.
b. Suppose the widget monopolist can charge a different price for every widget (i.e. the
widget producer can engage in perfect price discrimination). How many widgets will
she sell and how much profit will she earn.
c. Rank the outcomes in (a) and (b) in terms of the widget producer's profits as well as
in terms of economic efficiency (i.e. welfare).

ec172sp2020hw10.pdf
Note: Staple your assignment together before handing it in, otherwise you will not
receive credit.
1. Widgets are produced by a monopolist. The cost of producing widgets is given by
the following cost function
C(q) = 2q^2
The inverse demand function for widgets is given by P = 120 - q where P is the price
per widget and q is the quantity of widgets.
a. Suppose the widget monopolist must charge the same price for every widget (i.e.
the widget producer is a single price monopolist). How many widgets will she
produce and what price will she charge per widget to maximize her profits?
Compute her profits.
b. Suppose the widget monopolist can charge a different price for every widget (i.e. the
widget producer can engage in perfect price discrimination). How many widgets will
she sell and how much profit will she earn.
c. Rank the outcomes in (a) and (b) in terms of the widget producer's profits as well as
in terms of economic efficiency (i.e. welfare).

Added by Eugenia W.

Question

Please give Ace some feedback