Answer
a) Please see the first graph.
b) Please see the second graph.
c) The monopolist's profit would increase from $X$ to the sum of areas $X+Y+Z$.
d) The monopolist's profit increases from $X$ to the sum of areas $X+Y+Z$. The total change from price discrimination is area $Z$.
e) The monopolist will decide to pay the fixed cost as long as the sum of areas $Y+Z$ is greater than the fixed cost ($C$).
f) The social planner should allow the monopolist to pay the fixed cost if $Z > C$.
g) The monopolist would be willing to price discriminate when price discrimination would not be in the overall best interest of the public.
Work Step by Step
a) The monopolist would charge a price of $P_{0}$ and sell a quantity of $Q_{0}$.
b) The monopolist's profit, the consumer surplus, and the deadweight loss are highlighted in the graph.
c) Since the monopolist would perfectly price discriminate, the monopolist would be able to extract every cent of profit from consumers.
d) The increase in the monopolist's profit is larger since the monopolist is perfectly price discriminating.
e) The monopolist would not pay the fixed cost if the two quantities ($Y+Z$ and $C$) are the same.
f) For the monopolist to be made better off, the additional surplus would have to be greater than the fixed cost.
g) The social planner would want the monopolist to price discriminate when $Z > C$. However, the monopolist would price discriminate when $Y+Z > C$. Thus, the monopolist would price discriminate when $Y+Z > C > Z$.
