Problem
Assume that a professional sports team is a profit-maximizing (but not a price-discriminating) monopolist. Assume the inverse demand for tickets is given by P = 12 - 0.75Q. Assume that the marginal cost of selling another ticket is constant and equal to three ($3) per ticket sold and fixed costs $19. Assume there are no capacity constraints.
i. Calculate the amount of deadweight loss to society from not having perfect competition in tickets.
ii. Now, assume the team can identify the maximum willingness to pay for each unique consumer (that is, the team is a perfect price-discriminating monopoly). How many tickets will it sell and at what price?