A monopoly sells a good in city A.Inverse demand is given by P = 80 - Q.Marginal cost is given by MC = 20.

(a) (4 points) What are the profit-maximizing quantity and price?

(b) (8 points) Suppose that city A can import the product from city B.In city B, the good is produced by a perfectly competitive industry with MC = 20.Transportation costs between city A and city B are $10 per unit.Explain how the monopolist's profit-maximizing price and quantity will change from that in part (a)?

(c) (8 points) Suppose that the production of the good in city A also produces an externality where the marginal external costs are $5 per unit. Explain briefly whether the government would want to levy a tax on the good of $5 per unit.