Hi, tutor

I'd like to ask the solution to the question. Thank you very much!

Trieste is a beautiful city located in the Gulf of Venice. Although it belongs to Italy nowadays, many people living there for generations speak languages other than Italian. This is the case of the Slovenes. The only Slovenian bookshop in Trieste is Trzaska Knjigarna (it simply translates to Triestian Bookshop). During the 1970s it was relatively difficult for the Slovenes from Trieste to cross the border and buy books in Yugoslavia. Therefore Trzaska Knjigarna (or just TK) was effectively a monopolist. By that time the monthly demand in Trieste for the novel Na klancu by Ivan Cankar was given by QD = 1200 - 12P, where P is measured in thousands of Italian lire. TK estimated the total cost of selling Na klancu as TC = Q2/12 - 40Q + 3000. (a) Suppose TK wants to maximise profits, what would be the price for Cankar's novel? In your answer you must draw a diagram indicating the relevant curves and the equilibrium outcome. [4 marks] (b) The owners of TK decided they wanted to support the reading of Slovenian books. How many copies of the novel TK would sell if they wanted to make the market efficient? Please identify the quantity in the diagram drawn for part a) [2 marks] (c) One of the employees at TK proposed a third solution: setting a price such that revenue is maximised. Which was the price he proposed? [1 marks] (d) After a few years some of the conditions on the market changed. Demand remained QD = 1200 - 12P. However, total cost became TC = 50Q + 5000. Assume again that TK acted again as a monopolist. Moreover, the Italian government imposed a 2,000 lump sum tax on all bookshops. Calculate TK's new price and profits under the new conditions. Please, use a new diagram to illustrate your answer. [3 marks]