Consider the market represented by the figure to the right. Suppose this market has one firm. If the firm can only charge a single price, what is this firm's profits (when maximizing profits)? The figure to the right assumes the firm has no fixed costs. a) Correspondingly, remaining surplus available to consumers is Now suppose the firm is able to capture all consumer surplus by charging different prices to b) The firm now earns profits of $? $ per unit 100.00 90.00 80.00 70.00- 60.00- 50.00 40.00 30.00 20.00- 10.00- 0.00+ 0 MC=ATC MR D 10 20 30 40 50 60 70 80 90 100 Quantity

Consider the market represented by the figure to the right. Suppose this market has one firm. If the firm can only charge a single price, what is this firm's profits (when maximizing profits)? The figure to the right assumes the firm has no fixed costs. a) Correspondingly, remaining surplus available to consumers is Now suppose the firm is able to capture all consumer surplus by charging different prices to b) The firm now earns profits of $? $ per unit 100.00 90.00 80.00 70.00- 60.00- 50.00 40.00 30.00 20.00- 10.00- 0.00+ 0 MC=ATC MR D 10 20 30 40 50 60 70 80 90 100 Quantity

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.3P

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