Q1. Define price discrimination.

Can perfect price discrimination removes the deadweight loss

associated with monopoly?
Q2. Given the followinf demand curve facing a monopoly:
Q= 14-2P
Find the profit maximizing price and output of the monopolist, if she has a constant marginal cost of
Rs.5. How will the total surplus in the market will change if she practices perfect price discrimination?
Q3. Suppose that a monopoly faces the following demand curve:
y = 100 p. The marginal cost of production is constant C(y)= 2.
a. Compute the equilibrium price and quantity in this market.
b. What would be the efficient quantity produced?
c. Compute the dead weight loss due to the monopoly
20 points)
A monopoly faces market demand Q =30

P and has a cost function C(Q) = Q

(a)(5 points) Find the profit maximizing price and quantity and the resulting profit to the monopoly.
(b)(5 points) What is the socially optimal price? Calculate the deadweight loss (DWL) due to the
monopolist behavior of this firm.