Question

1. A monopolist faces the weekly market demand curve P(Q) = 60 - 2Q^2, where Q is the quantity he sells. The monopolist charges two customers two different prices. The price charged to the first customer is $42. The price charged to the second customer is $10. Show that $392/3 dollars is the amount of consumer surplus the first customer loses from not being charged the second customer's price?

2.Suppose a commodity has demand ?D = 100^?−0.03? with quantity ? > 0. Identify where the elasticity of demand is elastic, unitary, and inelastic.

3. Suppose a commodity has demand ?(?) = 2 − ?/20 with quantity ? > 0. Compute the total revenue ??(?) and use it to locate where the elasticity of demand is elastic, unitary, and inelastic.

4. Suppose a market has demand curve ?(?) = ?(?^2 − 2? + 1), where ? > 0. Show that the area between the demand curve and the total revenue is 1/20 square units.

Answer 1

question 1.