3. Suppose that a monopoly faces a constant elasticity inverse demand curve: (3) Here p is the price at which quantity q of the monopoly's output will be demanded. The monopoly produces output at constant marginal cost 3 per unit of output. Note that this means that both average and marginal cost are equal to 3, and the total cost of producing output q is 3g. p: 109' 3. Calculate the elasticity of the inverse demand curve. b. Calculate prot maximizing price and cost for the monopoly. c. Show that if the government imposes a specic tax of T = 1 on each unit of the monopoly's output, the rm will raise its price by more than T : l. (1. Suppose that the government instead imposes an ad valorem tax at rate t. Calculate the price received by the monopoly in this case (Le. nd the prot maximizing choice of p3 : 13:). By how much does the price paid by consumers (pc) rise (relative to the notax case, part b) as a result of the tax