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A monopolist in a given market faces inverse demand function P = 90 - 2 Q. Its cost structure is given by C(Q) = 10

A monopolist in a given market faces inverse demand function P = 90 - 2 Q. Its cost structure is given by C(Q) = 10 Q + F, where F represents a set-up cost that the firm only pays if it decides to produce and sell in this market.

Solve this firm's profit maximization problem and determine the following:

The Lerner Index for this firm:

0.4

0.1

0.5

0.8

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