Task: The inverse market demand curve is P = 140 - Q, and the inverse supply curve is P = 20 + Q. Assume that the closed market is NOT competitive, but is controlled by a single supplier. Again using the same inverse supply and demand curves, compute the following:
1. The monopoly equilibrium production/consumption level
2. The market price
3. The lost value of consumption, relative to the equilibrium in a competitive market.
4. The resource savings gain, relative to the equilibrium in a competitive market
5. The consumer surplus relative to the equilibrium in a competitive market.
6. The producer surplus relative to the equilibrium in a competitive market.
7. The welfare loss incurred in this monopolized market, compared with the equilibrium in competitive market.