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A monopolist has marginal revenue equal to 100 - 4Q and a production function of Q = L^(.25) K^(.25).The monopolist has $10 of fixed costs,
A monopolist has marginal revenue equal to 100 - 4Q and a production function of Q = L^(.25) K^(.25).The monopolist has $10 of fixed costs, the price of labor is $10 and the price of capital is $15.
a) for this monopoly, sketch the isoquant and isocost for producing 5 units of output.
b) what price does the monopolist charge and what quantity does it produce?
c) calculate consumer surplus, producer surplus, deadweight loss, and the firm's profit.
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