_{micro economics}

Suppose a firm producing differentiated products faces a demand curve represented by P = 1200 - 2Q. The firm produces their products according to total cost curve: TC = 100 + 4Q2. a. Given the shape of the marginal cost curve, what does this suggest about the shape of the marginal product curve? (2) b. Calculate the MRS and the MRT when the firm produces 100 products and comment on whether the firm should sell more or fewer goods to maximise profit. (4) c. What are the optimal price and quantity values if the firm would like to maximise profits selling this differentiated product? (2) d. If the firm were to produce at the perfectly competitive price (with no market power) and output how many goods would they sell and at what price would they sell it at? (2) e. Given this information, calculate the deadweight loss that arises from this firm's market power and illustrate this on a detailed diagram. Clearly show the price- setting and price-taking equilibrium price and quantity (6) f. Explain using relevant formulae why all Isoprofit curves approach the zero-economic profit curve as quantity increases. (4)