A. Show on the graph above the profit-maximizing equilibrium Q₁ and P₁ for this monopolist. [Hint: Recall from Econ 302 what the MR curve looks like for a linear demand curve. In particular, every point on the MR curve is halfway between the demand curve and the Y axis.]

B. Now suppose that the demand curve becomes more elastic at all points, but continues to pass through the same price-quantity point that you found to be optimal in part (a). Call this new curve D₂. (That is, if the profit-maximizing monopolist was producing Q₁ and selling it for P₁ in part (a), quantity Q₁ still has price P₁ on the new, more elastic, demand curve.) [Hint: Think very hard about how the new MR₂ curve will compare to MR₁.] Construct the new equilibrium for the monopolist (Q₂, P₂) and compare it to the old, in terms of quantity, price, and profit.