Question 01 Consider a monopoly with the following marginal cost and demand curves: MC = 2Q + 200, p = 2,600 - 2Q Calculate profit-maximizing quantity, Q", and the associated price, p", for this monopoly. Which of the following alternatives is correct? (a) Q' = 400 and p" = $1,000 (b) Qm = 400 and pl = $1,800 (c) Qm = 600 and pl = $1,400 (d) Qm = 600 and pl = $1,800 Question 02 Consider the same information in question 01. Compute the monopolist's markup (also known as Lerner Index). The markup is: (a) 2/7 (b) 4/9 (c) 7/2 (d) 9/4 Question 03 Consider the same information in question 01. Do the welfare analysis of the equilibrium resulting from the monopolist's profit-maximization. That is, calculate the consumer surplus, CS, and the producer surplus, PS. Which of the following alternatives is correct? (a) CS = $360,000 and PS = $360,000 (b) CS = $250,000 and PS = $500,000 (c) CS = $160,000 and PS = $480,000 (d) CS = $80,000 and PS = $160,000Question 04 Consider the same information in questions 01 and 03. Compare the monopoly equilibrium to the competitive equilibrium and calculate the deadweight loss, DWL, associate with the monopolist's profit-maximization. Which of the following alternatives is correct? (a) DWL = $360,000 (b) DWL = $250,000 (c) DWL = $160,000 (d) DWL = $80,000 Question 05 Consider the same information in questions 01 and 04. What kind of government policy could be used to correct the inefficiency (that is, remove the deadweight loss) associated with the monopolist's profit-maximization? The government could... (a) implement a price ceiling equal to p= = $1,000 (b) implement a price ceiling equal to p= = $1,400 (c) implement a price floor equal to pf = $1,800 (d) implement a production quota equal to q = 400