Monopoly effect on consumer/producer surplus

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.

Solution Summary

The inverse market demand curve is evaluated.