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5) Consider a profit maximizing monopoly. The demand for the monopoly's product is given by Q = In(a - bP) and its cost function is
5) Consider a profit maximizing monopoly. The demand for the monopoly's product is given by Q = In(a - bP) and its cost function is C(Q) = ce, where the parameters a, b, and c are all positive. Let Q* be the monopoly's optimal (profit-maximizing) output. Which of the following gives aQ* /da? A) aQ 1 da a-bP B) 2Q* 1 da a-bP-ceQ aQ* 1 e? (2+ Q+bc) aQ* 1 da 1+Q+bc 2Q* = e-Q da aQ* = a - bP - ce da G 2Q* = a - bP + ce2 da aQ* = a - bP - e-2 da
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