A monopolist demand curve for providing an output X is given by the following:

=$160$0.0016

where is price and is total output in the market. The marginal and average total cost per unit of is $40 per unit.

Part A(4 marks)

Calculate the monopoly profit-maximizing price/output combination, and the competitive market long-run equilibrium activity level.

Part B(4 marks)

Use a diagram to explain the "monopoly problem" from a social perspective in this instance.

Part C (2 marks)

State two differences between monopoly and monopolistic competition.