Bentley is a monopolist; she is the only producer of financial planning software. Assume that demand for the software is given by P = 120 - Q while the costs for making the software are T C = 1 Q2.
(a) How much does Bentley choose to produce, QM , and what price does she charge,
P M ?
(b) If this industry were perfectly competitive instead, what would be the quantity produced, QC , and the price charged, P C ?
(c) Compare the overall surplus under competition with the overall surplus under a monopoly. Calculate CS and P S under both scenarios. Calculate the deadweight loss associated with the monopolization of this industry.