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1 .-Dayna's Doorstops, INC. (DD) is a monopolist in the doorstop industry. Its total cost function C(-) is given by C(Q) =50 + lOQ. The
1 .-Dayna's Doorstops, INC. (DD) is a monopolist in the doorstop industry. Its total cost function C(-) is given by C(Q) =50 + lOQ. The demand function for doorstops D(-) is given by the linear function D(P) = 1 20 5P . (a) Write down the protmaximizing problem for DD, and determine its optimal output, Q\". (h) Now, repeat the exercise rst computing the elasticity of demand, and using this and what you know abOut the Lerner index of a monopolist to compute the optimal monopoly price. Check that (of course) you obtain the same answer as in a). (c) How much consumer surplus CS\
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