Answer all parts of this question. (a) A monopolist faces a demand curve of the form Q = 20 P, where Q is the number of units produced (and sold) and P is the market price. The rm's cost of production is given by C = 5t} + 40, so the marginal cost is 4. (i) [5 marks] Show that the monopolist's marginal revenue curve is given by BAR = 20 2Q. Then calculate the output produced and the prot made by the monopolist. (ii) [5 marks] Suppose that by an investment in new technology that increases xed cost the monopolist can halve marginal cost. Calculate the output and the prot made by the monopolist if it makes this investment. What is the maximum additional fixed cost that it would be worthwhile incurring in order to achieve this reduction in marginal cost? (b) [8 marks] Jane sells T-shirts for a rock concert. She sells them at a retirement community and at a high school. The people in the retirement community love rock music and have lower price sensitivity than the teenagers, who have more substitutes and less money. Assume the marginal cost of Tshjrts is 2, the elasticity of demand of the senior citizens is 1.5 and the elasticity of demand of the teenagers is 2.5. At what prices should Jane sell the T-shirts at the retirement home and at the high school, respectively, to maximise her profit? (c) ['i' marks] Goods are sometimes bundled so that the price of the bundle is less than the sum of the prices of the goods in the bundle sold separately. Explain how this practice of bundling can increase profits