If a monopoly faces an inverse demand curve of p=450-Q, has a constant marginal

Question

If a monopoly faces an inverse demand curve of p=450-Q, has a constant marginal and average cost of $30, and can perfectly price discriminate, what is itsft? What are the consumer surplus, welfare, and deadweight loss? How would these results change if the firm were a single-price monopoly? Profit from perfect price discrimination (x) is S 88200. (Entor your responso as a wholo numbor.) Corresponding consumer surplus is (enter your response as whole numbers): CS-$ welfare is and deadweight loss is DWL = $

Explanation / Answer

1- FROM FIRST DEGREE PRICE DISCRIMINATION,

P = MC

SO P = 30 THUS Q = 420

PROFITS = CONSUMER SURPLUS = 0.5(450-30)(420)= 88200

consumer surplus here is zero because all teh surplus is extracted in terms of profits

welfare is equal to profits as it is the sum of producer and consumer surplus = 88200

deadweight loss is zero as p = MC, thus there is no loss in total surplus, total surplus is maximized where p = mc

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