Q3. Consider a profit-maximising monopolist facing a downward sloping demand curve. a) Is marginal revenue lower than the price charged by this monopolist? Explain your answer intuitively. [2 marks] b) Would this monopolist produce on an inelastic portion of the demand curve? Explain your answer intuitively. [2 marks] c) How would the deadweight loss to the economy from the monopoly change if the demand curve suddenly became horizontal? [2 marks] d) If the demand stayed downward-sloping but the monopolist decided to maximise its revenue rather than profit, what would the elasticity of demand be at the optimum? For full marks provide both intuitive and mathematical explanations. [4 marks]