Great Reception, Inc., is a single-price monopolist in the market for cell phones. Assume that there is no fixed cost, and both marginal cost and average total cost are constant. When profit maximizing, Great Reception will produce ______ cell phones and charge ____ each. (350; $26, 350; $12, 700; $12, or 200; $32)
Quantity = 110 Price =36 MR=32 Revenue=3,600. MC = 12 TC=1,200.
a. What is GreatReception's profit when producing at the profit-maximizing output ? ($9800, $9100, $4200, or $4900)
b. What is the total consumer surplus when GreatReception operates as a monopolist? ($9800, $7350, $6900, or $2450)
c. How much deadweight loss does GreatReception cause when it restricts output and charges a price above marginal cost? ( $6900, $9800, $7350 or $2450)
d. Assume that GreatReception, Inc., can charge any number of prices to various consumers. If GreatReception perfectly price discriminates, what is its total profit? ($1225, $9800, $4900, or $2450)