CirrosisHepato (CH) is a monopolist in the cheap alcohol market. The firm faces the demand curve Q= 50 - (10/3)p. Where Q is in millions of units. The firm has a constant marginal cost of $3 per bottle. The fixed cost of the firm is $70 million.

a)In order to find the quantity that maximizes profit, CH needs to calculate total revenue as a function of how much it produces. Derive total revenue by calculating the inverse demand (p as a function of Q), and then multiply by Q.

b)The Marginal Revenue curve is MR = 15 - 0.6Q. For those who know how to take the derivative of an equation, can you show how MR is the derivative of Total Revenue? For everyone, does theMR formula make intuitive sense compared to the inverse demand curve?

c)Draw the demand curve, marginal revenue curve, and marginal cost curve.

d)At what level of quantity is Total Revenue maximized for CirrosisHepato? What is the pricecharged at this production level?

e)At what level of quantity is profit maximized for CH? What is the price charged at this production level? Is the quantity produced for profit maximization the same as the quantity produced for when total revenue is maximized? Intuitively explain why or why not.

f)At the profit maximizing level of production, what is CH's profit? At the total revenue maximizing level of production, what is CH's profit?