3. Use the following graph of a monopolist's market to answer questions. a. What price/quantity pair is efficient? i.e., when is surplus maximized? At the price P1 and quantity Q2, surplus is maximized. b. lfthe firm in this graph chooses to raise its price, what happens to the quantity that it sells? If firm chooses to raise its price, the quantity will decreased because at price P1 the quantity is Q1 which is less than the quantity (12 and a lesser price P2. lfthe firm is maximizing profits, what price does it charge? How many units will it sell? The profit maximizing choice for monopoly will be to produce at the quantity where marginal revenue is equal to marginal cost. S=oat P1 and Q1 the firms profits are maximized. What is the deadweight loss from this monopoly pricing? The deadweight loss __ua|the change in price multiplied by change in quantity demanded. It occurs when equilibrium is not optimal