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2. Let X= 1405 Suppose that the demand for the monopolist's product is given by q = X p and the total cost of production

2. LetX= 1405

Suppose that the demand for the monopolist's product is given byq=X pand the total cost of production isc(q) = 10q.

(a) Suppose a price ceiling of $30 is imposed. What is the resulting profit-maximizing price and quantity?

(b) What price ceiling has to be imposed in order to induce this firm to produce the socially optimal level of output?

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