Essay
Internet service in the local market is supplied by Laura's Internet Service. The demand is
QD = 6,500 - 100P P = 65 - 0.01Q. Laura's marginal cost function is
MC(Q) = 6.67 + 0.0067Q
If Laura practices first-degree price discrimination, what are consumer surplus and Laura's producer surplus in this market? Does Laura's market power and first-degree price discrimination result in reduced societal welfare?
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