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7. A monopoly can produce at constant average and marginal costs of AC = MC = 5. The market demand curve is given by: P
7. A monopoly can produce at constant average and marginal costs of AC = MC = 5. The market demand curve is given by: P = 53 - Q- a. Use the twice-as-steep rule to find the equation of the marginal revenue curve cor- responding to the market demand curve. b. Calculate the profit-maximizing quantity of output for the monopoly. What price will it charge? c. Find the monopolist's profits. d. Find the consumer surplus under monopoly. e. What level of output would be produced by this industry under perfect competi- tion? What would the perfectly competitive price be? f. Find the consumer surplus under perfect competition. g. What is the value of the deadweight loss from monopolization of this industry? h. Verify that the sum of consumer surplus under monopoly, monopoly profits, and deadweight loss is equal to consumer surplus under perfect competition
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