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Assume we have a monopolist in the market who faces a market demand P = 20 2Q. His marginal cost is $2, and has a
Assume we have a monopolist in the market who faces a market demand P = 20 2Q. His marginal cost is $2, and has a fixed cost of $30. 1) Suppose the monopolist's objective is to maximize profit. What quantity should it produce and what price should it charge? (5 marks) 2) How much is the learner's index of monopoly power? (5 marks) 3) Calculate the price elasticity of demand at the monopolist profit maximizing quantity. (5 marks) 4) Suppose instead of having monopoly the market was perfectly competitive. What quantity should a firm produce and what price should it charge? (5 marks) 5) How much is the deadweight loss that result from the monopoly? (5 marks) 6) Now suppose the monopolist's objective is to maximize total revenue. What quantity and price achieve this objective
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