A) Suppose the lawn-mowing industry approximates a perfectly competitive industry. Suppose also that a single firm buys all the assets of the lawn-mowing firms and establishes a monopoly. Contrast these two market structures with respect to price, output, and allocation of resources. Would you expect the monopoly to survive? Explain.
B) The Best Computer Company just developed a new computer chip, on which it immediately acquires a patent, and becomes monopoly producer/seller. Show and explain what happens to consumer surplus, producer surplus and the deadweight loss (DWL) if the firm goes from a single price monopoly to perfect price discrimination.
(kindly provide drawn graph as reference)
A) Suppose the lawn-mowing industry approximates a perfectly competitive industry. Suppose also that a single firm buys all the assets of the lawn-mowing firms and establishes a monopoly. Contrast these two market structures with respect to price, output, and allocation of resources. Would you expect the monopoly to survive? Explain.
B) The Best Computer Company just developed a new computer chip, on which it immediately acquires a patent, and becomes monopoly producer/seller. Show and explain what happens to consumer surplus, producer surplus and the deadweight loss (DWL) if the firm goes from a single price monopoly to perfect price discrimination.
(kindly provide drawn graph as reference)
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