Perfect Pricing & Two-Part Tariff

Question 1

Consider a monopolist with total costs of TC = Q2 + 4Q + 36 and marginal costs of MC = 2Q + 4.
They face a market demand of P = 40 - QD. Round answers to one decimal place.

1) What is the perfect pricing equilibrium price range and quantity?

Top Price = Bottom Price = Q* =

2) What are consumer, producer, and total surplus in the perfect pricing equilibrium?

CS = PS = TS =

3) Is the perfect pricing equilibrium an efficient market outcome?

4) What is the two-part tariff equilibrium per-unit price, fixed fee, and quantity?

P* = Fixed Fee = Q* =

5) What are consumer, producer, and total surplus in the two-part tariff equilibrium?

CS = PS = TS =

6) Is the two-part tariff equilibrium an efficient market outcome?



Score = 0