Answer all the questions. Each question is of equal value. Question 1 The profit maximizing rule for choosing the optimal output (0*), is choose the output where marginal cost: marginal revenue (as long as MR is not rising, MO is not falling and the price exceeds average variable cost). Explain carefully and use a diagram to illustrate why a profit maximizing monopolist should: a) Not produce any more than 0* and b) Not produce any less than 0*. Assume MO is rising and MR is falling. Question 2 a. Explain the notion of market power as it relates to a monopoly. b. Explain why for a monopolist, marginal revenue is less than price. Question 3 a. Explain why professional baseball teams are accurately characterized as monopolies when some cities, for example, New York and Chicago, have two teams. b. Explain why the shape of the marginal cost (MC) curve for a monopoly sports franchise is characterized as horizontal over a given range and the vertical after that