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A profit-maximizing monopolist faces a demand function given by Y=1000-20 p, where p is the price of her output in dollars. She has a constant
A profit-maximizing monopolist faces a demand function given by Y=1000-20 p, where p is the price of her output in dollars. She has a constant marginal cost of 20 dollars per unit of output. In an effort to induce her to increase her output, the government agrees to pay her a subsidy of $10 for every unit that she produces. What is the price and output a) without subsidy; b) with subsidy?
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