Major Tom's Space Flights offers commercial space flights to people willing to pay for a seat on his rocket ship. Major

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Major Tom S Space Flights Offers Commercial Space Flights To People Willing To Pay For A Seat On His Rocket Ship Major 1 (40.46 KiB) Viewed 80 times

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Major Tom's Space Flights offers commercial space flights to people willing to pay for a seat on his rocket ship. Major Tom currently has a monopoly on commercial space travel. The demand for seats on his rocket ship and the cost information are shown in the table and graph below. Major Tom's Market for Space Travel Price (millions of Quantity Demanded Marginal Revenue Marginal Cost(millions of dollars) (seats) (millions of dollars) dollars) $34 32 30 28 26 24 22 20 18 16 14 12 10 0 1 2 3 4 5 6 7 $32.00 28.00 24.00 20.00 16.00 12.00 8.00 4.00 0.00 -4.00 -8.00 -12.00 $5.60 6.00 6.40 6.80 7.20 7.60 8.00 8.40 8.80 9.20 9.60 10.00 9 10 11 12 Market for Seats on Rocket Ship Tools $35 $30 Deadweight of dollars) $25 $20 $20
Market for Seats on Rocket Ship $35 Tools $30 . Deadweight $25 $20 $20 Price (millions of dollars) $15 $10 MC $10 D $5 71 MR 12 0 0 2 4 6 8 10 12 14 16 Quantity (seats)
Instructions: Enter your answers as a whole number a. For Major Tom's Space Flights, the profit maximizing level of output is seats and the profit maximizing price is $ million b. In the market for Major Tom's Space Flights, the allocatively efficient level of output is seats and the allocatively efficient price is $ million c. If the market for space flight seats were to go from the monopoly solution to the allocatively efficient solution, the change in consumer surplus would be $ million d. Using the graph, identify the area of deadweight loss that results from Major Tom having a monopoly in commercial space flight Instructions: Use the tool provided "Deadweight Loss to illustrate this area on the graph above.