3. Think of a small firm that makes a patent-protected heart stent, so that for the next decade it has an effective monopoly on the product. Demand is Q. = 300 - 1.58, and marginal cost rises with Q as in MC = 0.750 (a) Draw a generic graph, not to scale but labelled, of this firm's basic situation showing D, MR, and MC. (b) What is this firm's profit-maximizing output and price? Show P* and Q* on the graph, and then work them out numerically (showing your work). EXTRA CREDIT For the firm in question 3, what is its markup when it's at profit-maximizing output? How would you describe the degree of monopoly power it has? 80 000 11 F A $ 4 & * 2 % 5 3 6 6 & 7 8 8 9 E R T Y