3. (25 points - 15a, 5b, 5c) Suppose that the market-level demand curve for microeconomics textbooks is Q 600 - 1.5P, where Q measures thousands of textbooks per year and P is the price of textbooks in dollars. (a) Suppose that the price of textbooks is initially $100. i. What is the point elasticity of demand at this initial price, and at the corre- sponding quantity? Explain the interpretation of this elasticity in words. ii. What marginal costs, if any, would justify a price of $100 as a monopolist's optimal price? iii. What marginal costs, if any, would justify a price of $100 as the equilibrium price in a competitive market? (b) For whatever reasons, the following year demand stays the same but the price increases from $100 to $300. What is the decrease in consumer surplus due to this price change? (c) Suppose price is $300, the market is competitive, and there are currently no taxes on textbooks. The government decides to add a tax of $10 to the sale of each textbook. What is the plausible range of after-tax prices paid by the consumer? What economic factors determine whether prices will be at the high end of this range or the low end of this range