(c) Make a rough sketch of the demand curve and the marginal cost curve of the monopolist. Indicate on the diagram: (i) the output level produced by the unregulated monopolist; (ii) the socially optimal output level; and (iii) the efficiency loss associated with the output level produced by the unregulated monopolist.

2 Let the inverse demand curve for a monopoly firm be:

and let the total cost of the firm be: