Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. Identify the consumer surplus of the additional sales. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why or why not?
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Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm).
The graph shows the demand, marginal revenue (MR), and marginal cost (MC) curves for a monopoly. The profit-maximizing output level (Qm) is 32 units, and the corresponding price (Pm) is 68. At this output level, the monopoly maximizes its profit by setting the price where the marginal revenue equals the marginal cos
