1. 9 8 7 6 5 2 3 4 price MC=AC=2 P=10-Q MR Quantity X Y Z

2. Demand for adults Demand for seniors 5.5 3 60 45 D C B ATotal welfare=A+B+C+D

3. 50 5 100150250 6.25 B C To find the equation of line ABC Find slope: 5/200=1/40 So general equation is K-(1/40)q=p If p=0, K=6.25 Agg demand is 6.25-1/40(q)=p Agg MR is MR=6.25-(1/20)q A

4. 3.625 Agg demand Agg MR MC=1 105 MR=MC 6.25-(1/20)q=1 q=105

5. Agg demand Agg MR MC=1 105 MR=MC 6.25-(1/20)q=1 q=105 A B C D E F G CS=ABECD PS=EFGC Welfare=ABECD+EFGC

6. 80 60 40 20 4070 90100 A B C W X Y Z PS=A+B+C CS=W+X+Y+Z

7. Type A 100 50 Type B

8. Type A 100 50 Type B P=25 q=37.5 75 CSb=F=1406.25 2812.5

9. Q K U1 U0 Φ

10. Q K U1 U0 Φ1Φ1 Q1 Q2 price

11. High Low c c+r Al Ah MR L MR H pHpH pLpL

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14. MC AC Demand P C ALL FLFL FMFM FHFH A C B D E G F H Q1Q2Q3 Profit from high income patients F H ADC ALL Profit from middle income patients BCED Loss from low income patients EFHG