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A monopolist (AT&T) is facing the following demand schedule p=24-3Q. That is, Q=0 implies P=24, then Q=1 implies P=21, and Q=2 entails P=18, and so
A monopolist (AT&T) is facing the following demand schedule p=24-3Q. That is, Q=0 implies P=24, then Q=1 implies P=21, and Q=2 entails P=18, and so on. Fixed costs will be neglected in this analysis. The marginal cost is constant and equal to 3 for every unit produced. Determine:
i) Price and Quantity to yield the efficient solution
ii) The quantity produced and the amount of maximum profits.
iii)Compute the quantity produced and the amount of maximum profits when we impose a sales tax equal to 4 (per unit sold).
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