1.Consider a demand function for a monopolist is P = 25 - 0.25Q; total costs are TC = 10 + 5Q + 0.2Q^2 ; marginal revenue is MR = 15 - 2Q; and marginal cost is MC = 5 + 0.5Q.

Answer the following questions

i)What is the profit-maximizing rate of output and price?

ii)Calculate the monopolist welfare loss (WL), where WL=1/2*1/n ;and n represent price elasticity of demand

iii)Use the Lerner index to determine if market power exists