Hello Sir/Madam,

This is the question I'm struggling with and would love to see how to solve it.

a) Compute the demand equation for Alpha

b) Identify the optimal output and the price for Alpha. Calculate the profit or loss for Alpha at this output.

c) Suppose that the CEO of Alpha decides that maximizing social welfare is more important than maximizing profits. Calculate the price, output, and profit or loss when Alpha produces smartphones at the social welfare maximizing output level.

d) Compare the welfare between Alpha as a profit maximizer and welfare maximizer. Is the society better off with Alpha as a social welfare-maximizing firm or as a profit-maximizing firm? You need to consider both the short-run and the long-run situation then explain.

e) How would Alpha sustain the output level that maximizes the social welfare for the society? Explain.

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