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2.-The following table contains information about demand of a (non-divisible) good and the marginal cost of the only firm that operates in that market. Q
2.-The following table contains information about demand of a (non-divisible) good and the marginal cost of the only firm that operates in that market. Q PQ) | MCQ 1 20 2 2 17 3 3 15 4 4 13 5 5 11 6 6 10 7 7 9 8 8 8 9 9 7 10 10 6 11 11 5 12 a) Compute the (or rather, a) competitive price and output. That is, compute the outcome in the market if the firm behaved as a price taker. b) When the firm considers its market power, show why the firm would NOT produce the 6 unit. That is, show the effects that doing so would have on its revenues and costs and conclude that it does not pay. ) Compute the optimal policy for the monopolist, and so the deadweight loss associated with the monopolist's market power
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