C2.

Suppose you are a monopolist in the market for a specific video game. Your demand curve is given by:

P = 80 - 0.5Q,

and your marginal cost curve is constant @ $10/unit. Your fixed costs equal $400.

1. Graph the demand and marginal cost curve.(2 marks)

1. Derive and graph the marginal revenue curve. (4 marks
2. Calculate and indicate on the graph the equilibrium monopoly price and quantity. (3 marks)

1. What is your profit? (3 marks)

1. What is the level of consumer surplus? (3 marks)