M.A in Economics (with specialisation in World Economics) JNU

Posted by Chandrani Sarma on Mar 19, 2010; 12:39pm
URL: http://discussion-forum.276.s1.nabble.com/M-A-in-Economics-with-specialisation-in-World-Economics-JNU-tp4762549.html

Entrance Exam 2008.
Q.2 (b) A natural monopolist has total cost C(Q)= 400 + 25Q and faces the market demand Q=200 - 2P. Solve for the monopolist's profit, output and consumer's surplus when price is set equal to average cost.
(c) there is 'two-part pricing'. That is, the monopolist sets the price equal to marginal cost and charges a fixed participation fee per consumer. Assume that the demand comes from 10 identical consumers. What participation fee would a profit maximising monopolist set?