Hi Elmarto, 
Can you figure this out?  I am going to have to verbally explain a
graph to you.  Here goes:

on the vertical axis (price side)there are the amounts 
of: $10, $130, and $250.

on the horizontal axis (quantity)is: o, 24, 48, 
The demand line comes from the $250 and intersects at $130, and $10.
The MC is straight across the $10 
The MR is comes from the $250 also and goes through the intersection
of $10 and ends up between the 24 & 48 quantity
The $130 and 24 intersect
The $10 and 48 intersect

a) what output level is the socially optimal output level?
b)assume that under perfect competition that we would be at the
socially optimal level of output. What would be the consumer surplus
that exists at that output level?
c)if the monopolist cannot engage in price discrimination then what
output and price does the monopolist charge?
d)what is the cost to society of a monopolist?  Be specific and refer
to the graph.

Hi k9queen!
As always, you can find the graph I understood from your description
at:

http://www.angelfire.com/alt/elmarto

If I misunderstood your directions, please let me know through a
clarification request.

a) In order to find the socially optimal output level, we must simply
look at the intersection of the demand curve with the MC curve. If I
correctly understood the graph you describe, this happens at 48 units,
which would be the socially optimal output level. This is because, at
less than 48 units, the value the society assigns to the good (namely,
the demand, the price they are willing to pay for the good) is more
than the cost of producing the unit (which is the MC). At more than 48
units, the opposite happens: the value of the good to society is less
than the cost of producing it. Therefore, it's also inefficient to
poroduce more than 48 units. Thus 48 units is the socially optimal
level of production. The price at this output level is $10.

b) The consumer surplus is shaded in the 2nd graph in the page I
mentioned above. You can learn more about consumer surplus at the
following link.

Consumer Surplus
http://www.digitaleconomist.com/cs_4010.html

c) The monopolist is interested in maximizing profit. Therefore, he
must charge a price such that the marginal revenue (MR) equals the
marginal cost (MC). This happens when the monopolist produces 24
units; at this quantity, the price the monopolist charges is $130
(because the demand price at 24 units is $130). Why is this the output
that maximizes the monopolist profits? If he were producing less than
24 units, we can see from the graph that the MR is greater than the
MC. Therefore, it is profitable to add one more unit of output. If he
were producing more than 24 units, in the graph we see that the MR is
less than the MC. Therefore, by decreasing production by 1 unit, he
can increase his profits. Thus 24 units is the output level that
maximizes the monopolist's profits. The price at this quantity is
$130.

d) As we have seen, the monopolist will produce 24 units, while the
optimal output is 48 units. Thus all the units between 24 and 48 are
valued by the society at more than its cost, but they are not being
produced because it's not profitable to do so for the monopolist. This
called a deadweight loss in efficiency, and this loss is shaded in the
graph for this question. As you can see, this deadweight loss is equal
to the value assigned to all the units between 24 and 48 minus the
cost of producing them (that's why the shaded area doens't go below
the MC line).


Google search strategy
consumer surplus
://www.google.com.ar/search?q=consumer+surplus&ie=UTF-8&oe=UTF-8&hl=es&meta=


Right now I'm having some trouble updating the home page where I
include the graphs. You can access them directly at the following
addresses:

http://www.angelfire.com/alt/elmarto/googleanswers/267944q1.jpg
(original graph)
http://www.angelfire.com/alt/elmarto/googleanswers/267944q2.jpg
(consumer surplus)
http://www.angelfire.com/alt/elmarto/googleanswers/267944q4.jpg
(cost to society)

I will link them to my home page as soon as I can. In order to view
them with better quality, once you're viewing them right-click on the
image and choose "Save Image as..."

I hope this helps! If you have any doubts regarding my answer, please
let me know through a clarification request. Otherwise I await your
rating and final comments.

Best wishes!
elmarto