Problem 1. Apple is a monopolist on the iPad market. The price elasticity of demand for iPads is 2 and the price of a new iPad is $500. (1.1) If Apple is pricing iPads optimally, what is the marginal cost of an iPad? (1.2) Suppose that, due to a manufacturing problem, the production cost increases by $50 per iPad. How much should Apple charge for an iPad after the cost increase? Justify.