Suppose market demand for a product is given by the equation P = 20 – Q. For this market demand curve, marginal revenue is MR = 20 – 2Q.
1. If the marginal cost of producing this good is 0, what quantity would a profit-maximizing monopolist produce?
2. If the marginal cost of producing this good is 4, what quantity would a profit-maximizing monopolist produce?
3. If the marginal cost of producing this good is 0, what price would a profit-maximizing monopolist charge for the product?
4. If the marginal cost of producing this good is 4, what price would a profit-maximizing monopolist charge for the product?
5. If the marginal cost of producing this good is 0, how much total consumer surplus would consumers receive in this market?
6. If the marginal cost of producing this good is 4, how much total consumer surplus would consumers receive in this market?