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Download Records decides to release an album by the group Mary and the Little Lamb. It produces the album with no fixed cost, but the total cost of downloading an album to a CD and paying Mary her royalty is $6 per

Question
Use the demand schedule for diamonds given in Problem 6. De Beers is a monopolist, but it can now price-discriminate perfectly among all five of its potential customers.
De Beers’s marginal cost is constant at $100. There is no fixed cost.
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Use the demand schedule for diamonds given in Problem 6. The marginal cost of producing diamonds is constant at $100. There is no fixed cost.
a. If De Beers charges the monopoly price, how large is the individual consumer surplus that

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Suppose that De Beers is a single-price monopolist in the market for diamonds. De Beers has five potential customers: Raquel, Jackie, Joan, Mia, and Sophia. Each of these customers will buy at most one diamond-and only if the price is just equal

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Jimmy has a room that overlooks, from some distance, a major league baseball stadium. He decides to rent a telescope for $50.00 a week and charge his friends and classmates to use it to peep at the game for 30 seconds. He

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Bob, Bill, Ben, and Brad Baxter have just made a documentary movie about their basketball team. They are thinking about making the movie available for download on the Internet, and they can act as a single-price monopolist if they choose to. Each

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a. If the industry is perfectly competitive, what will be the total quantity produced? At what price?
b. Which area reflects consumer surplus under perfect competition?
c. If the industry is a single-price monopoly, what quantity will the monopolist produce?

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Skyscraper City has a subway system, for which a one-way fare is $1.50. There is pressure on the mayor to reduce the fare by one-third, to $1.00. The mayor is dismayed, thinking that this will mean Skyscraper City is losing one-third of

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Explain the following situations.
a. In Europe, many cell phone service providers give away for free what would otherwise be very expensive cell phones when a service contract is purchased. Why might a company want to do that?
b. In

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Prior to the late 1990s, the same company that generated your electricity also distributed it to you over high-voltage lines. Since then, 16 states and the District of Columbia have begun separating the generation from the of electricity, allowing competition