11.11. Assume that a monopolist sells a product with a total cost function TC ! 1,200 # 0.5Q2 and a corresponding marginal cost function MC ! Q. The market demand curve is given by the equation P ! 300 " Q.

a) Find the profit-maximizing output and price for this monopolist. Is the monopolist profitable?

b) Calculate the price elasticity of demand at the monopolist’s profit-maximizing price. Also calculate the marginal cost at the monopolist’s profit-maximizing output.

Verify that the IEPR holds.