ECON 601 Final: ECON 601 Iowa State Econ601FinalF12
Document Summary
Harvey lapan: consider a monopoly firm with cost curve: q , where costs are measured in terms of the numeraire good. The firm has two types of customers, with quasi-linear preferences as follows: There are an equal number of each type of customer. In the above, consumption vector of customer of type h, where m is the numeraire whose price is one and x is the monopolist"s product. ,h: consider the case of pure monopoly, in which the firm must charge the same price for all customers, and must allow customers to choose how much to buy at that price. Find the profit maximizing solution for the monopolist, and calculate the inefficiency (deadweight loss) due to the monopoly. (the monopolist"s output must satisfy: (10 points) q x. Suppose the monopolist, in addition to charging each customer the same price, can charge each customer a fixed fee f to shop at his store.
