## Monopoly Example

Let inverse demand be $p=24-Q$ and the monopolist's cost function be $c(Q)=\frac{1}{2}Q^2$. Set up the monopolist's profit maximization problem and solve for the optimal $Q$ and $p$.

Try this problem for yourself and then watch this video walking through the solution.

## Monopoly Welfare Example

As in the last example, let inverse demand be $p=24-Q$ and the monopolist's cost function be $c(Q)=\frac{1}{2}Q^2$. We found in that example that the profit-maximizing quantity $Q^m=8$ and the profit-maximizing price $p^m=16$. What is the consumer surplus, producer surplus, and deadweight loss in this example? Find actual numbers!

Try this problem for yourself and then watch this video walking through the solution.

Did you feel like any of the videos above were confusing, or could use more detail? If you're a student at Iowa State University, send me a quick note at mclancy@iastate.edu, referencing the video number and your issue, if applicable.