1. A monopolist for a specialized product faces a market demand curve ofP=50004Q.

a)SupposeMC=20. What is the profit-maximizing price and quantity for the monopolist?

b)What is the price elasticity of demand at the price and quantity in Part a)?

c)Now supposeMC=0. What is the profit-maximizing price and quantity for the monopolist?

d)What is the price elasticity of demand at the price and quantity in Part c)?

e)How does the marginal cost of producing affect the price elasticity of demand at the price charged by the monopolist?