Question 1 Given a monopolist who has identified two submarkets or group of buyers for its product with demand schedule: 𝐺𝑟𝑜𝑢𝑝 1: 𝑄1𝐷=40 − 5𝑃1 𝑎𝑛𝑑 𝐺𝑟𝑜𝑢𝑝 2: 𝑄2𝐷=60 −10𝑃2 The short run total cost curve of the monopolist is: 𝑆𝑇𝐶: 𝐶(𝑄)= 0.25𝑄2+120, where 𝑄 = 𝑄1+ 𝑄2, with 𝑄1 𝑎𝑛𝑑 𝑄2 as quantities in submarkets 1 and 2 respectively. 𝑃1 𝑎𝑛𝑑 𝑃2 are the units prices in (rands) in submarkets 1 and 2.

There is a monopolist and two groups of consumers, students andgeneral consumers. The total demand of students is 𝐷1(𝑝) = 10−𝑝, while the total demand of general (non-student)consumers is 𝐷2(𝑝) = 40 − 2𝑝. The monopolist’s (short-run) variable cost function is 𝑐(𝑞) = 2𝑞. Throughout thisquestion, the monopolist uses linear pricing.(a) [5 marks] Discuss reasons why the demands of the two groups may be different. For the purpose of thisquestion, assume that every consumer has unit demand. (Limited to 100 words.)(b) [15 marks] Let us assume that the monopolist sets the same price for both groups of consumers. The problemthen becomes a monopolist’s problem facing the market demand 𝐷1 + 𝐷2. Find the monopolist’s optimalprice, consumer surplus and producer surplus.(c) [20 marks] Now assume that the monopolist sets a price for students and a potentially different price for non-students. Find the optimal pricing, consumer surplus and producer surplus.(d) [5 marks] Explain why the monopolist needs to check stude

Suppose a monopolist faces a market demand curve of the form: P = 122 – 0.2Q. This monopolist has a total cost curve given by: TC = 2Q. If the government were to regulate this monopolist and require them to charge a price equal to average cost, this price would be equal to $_____, and the monopolist would make a profit of $______.Group of answer choices2; 36,000.0; 0.2; 0.61; 17,995.62; 18,000.

The market demand curve for a monopolist is typically: A. horizontal B. unit elastic C. perfectly elastic at market price D. downward-sloping

Suppose a monopolist faces a per period demand curve having the form: P = 11 – 0.005Q. Her total cost function is given by: TC = 0.5Q. This monopolist is able to practice second degree price discrimination, by selling off batches of her product along the demand curve. She chooses two prices: $9 per unit and $5 per unit. What is the consumer surplus in each period? Group of answer choicesConsumer Surplus = $4,000.Consumer Surplus = $2,400.Consumer Surplus = $1,600.Consumer Surplus = $2,800.Consumer Surplus = $2,000.

Suppose a monopolist faces a demand curve of the form P = 180 - 2Q. This monopolist faces a total cost curve of the form TC = 20Q. If this monopolist was regulated with "average cost pricing" so as to make a "normal" rate of return, what would be the price the government requires the monopolist to charge? What would be the monopolist's profit?Group of answer choicesP = $20; The monopolist would make a loss, which would be subsidised by the government.P = $100; The monopolist would make a loss, which would be subsidised by the government.P = $0; The monopolist would make a loss, which would be subsidised by the government.P = $100; The monopolist would make a positive economic profit.P = $20; The monopolist would make a zero economic profit.