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+ 24. A price searching firm faces the demand curve P = 20 - Q and has marginal costs given by MC = 12. a.
+ 24. A price searching firm faces the demand curve P = 20 - Q and has marginal costs given by MC = 12. a. Calculate the firm's marginal revenue curve if the firm can only charge one price. b. What is the optimal price and quantity the firm will charge in order to maximize profits? c. If the firm's fixed costs are $16, what are the profits of the firm? d. Draw the demand curve, marginal revenue curve, marginal costs, and aver- age total costs in a graph. Make sure you label everything, including the optimal price and quantity. Calculate and show on a graph the deadweight loss. e. Now suppose the firm is able to charge an entry fee, as well as a price for every unit sold. What is the optimal entry fee, the price per unit, and the deadweight loss? Calculate them, and show these on a graph as well
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