Question: Suppose a perfectly competitive industry can produce widgets at a constant marginal cost of $10 per unit. Monopolized marginal cost rise to $12 per unit, because two dollars per unit must be paid to lobbyists to retain the widget producer's monopoly position. Suppose a market demand for widgets is given by the following equation

P = 20 - 0.02Q

a. Calculate the perfectly competitive and monopoly equilibrium outputs and prices.

b. Calculate the total loss of consumer surplus from monopolization of widget production.