3. (15 points) Suppose Mr. Beast is touring/putting on a show at various venues across North America. Furthermore, assume one of the shows will take place in Vancouver in May 2024. The hypothetical event will be held at BC Place in front of a sold-out crowd (/54,000 seats). Suppose there are two types of Mr. Beast fans: fanatical Mr. Beast fans and the average Mr. Beast fans. As the event is attracting a large crowd, suppose a single food vendor can get a gov- ernment contract allowing it to be the sole seller of quick meals just outside BC Place. The crowds will have a market demand for meals that will depend on the type of fan. Suppose the demand for each Fanatical Mr. Beast fan is: 1 D =1-xP ar 28x The demand for each Average Mr. Beast fan is: 1 D _1_ gqs =1 20 x P Given there are 14,000 Fanatical Fans and 40,000 Average Fans, the demand function is: b { 54000 2500P if P 4,000 2500 P(Q7) = 28 LQD otherwise 500 Suppose that instead of a perfectly competitive market, the monopolist providing the 2 quick meals has a cost function: C(Q) = F + 5.6Q + % (a) (5 marks) What is the firm's Marginal Cost curve? What is the Marginal Revenue (hint: you will have a discontinuous marginal revenue)? What would be the firm's optimal choice of quantity? What price would the firm charge? (b) (4 marks) What is the size of the producer surplus here? If F' = $90, 000 does the firm earn a profit selling quick meals? What is the relationship between Producer Surplus and profits? () (2 marks) Ignore the value of F' given in part (b). Suppose the government charges the monopolist for the ability to be the sole seller of quick meals, what is the maximum value it could charge? (Hint: what's the biggest F' can be?) Explain. (d) (4 marks) Instead of part (c) suppose the government imposes a tax of $1.20 per unit. How does this impact the market in terms of price, quantity, and the producer surplus