African Braids & Beauty is a natural monopoly in town, owned by Selina. Table 1 shows the demand schedule (the first two columns) and African Braids & Beauty's marginal cost schedule (the second and third columns). African Braids & Beauty has done a survey and discovered that it has four types of customers each hour: one woman who is willing to pay $16, one concession holder who is willing to pay $14, one student who is willing to pay $12, and one girl who is willing to pay $10. Price (dollars per hair braiding) Column 1) Quantity (hair braidings per hour) (Column 2) Marginal cost (dollars per hour) (Column 3) 18 0 -- 16 1 2 14 2 5 12 3 8 10 4 11 8 5 14 a. If Selina is a single-price monopolist, what price will she charge and how many hair braidings per hour will she sell? (Hint: construct and compute the Total Revenue and Marginal Revenue columns)? b. What is her total revenue? c. What is the market consumer surplus?

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African Braids & Beauty is a natural monopoly in town, owned by Selina

Marketing Jan 09, 2021

African Braids & Beauty is a natural monopoly in town, owned by Selina. Table 1 shows the demand schedule (the first two columns) and African Braids & Beauty's marginal cost schedule (the second and third columns). African Braids & Beauty has done a survey and discovered that it has four types of customers each hour: one woman who is willing to pay $16, one concession holder who is willing to pay $14, one student who is willing to pay $12, and one girl who is willing to pay $10.

Price (dollars per hair braiding) Column 1)	Quantity (hair braidings per hour) (Column 2)	Marginal cost (dollars per hour) (Column 3)
18	0	--
16	1	2
14	2	5
12	3	8
10	4	11
8	5	14

a. If Selina is a single-price monopolist, what price will she charge and how many hair braidings per hour will she sell? (Hint: construct and compute the Total Revenue and Marginal Revenue columns)?

b. What is her total revenue?

c. What is the market consumer surplus?

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