(Solution) - Serena is a single price profit maximizing monopolist in the sale of -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Pages: 5 Words: 1375

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Serena is a single-price, profit-maximizing monopolist in the sale of her own patented perfume, whose demand and marginal cost curves are as shown.

a. Relative to the consumer surplus that would result at the socially optimal quantity and price, how much consumer surplus is lost from her selling at the monopolist's profit-maximizing quantity and price?
b. How much total surplus would result if Serena could act as a perfectly price-discriminating monopolist?