Question 2 (25 Marks] The following figure shows the profit maximization equilibrium for a monopolist. Use the information in the figure to answer the following questions. Figure 1 R200 Price. Costs. and Revenue 175 150 R125 R110 ATC 190 75 50 MR 10 Quantity State the profit maximising output that the monopolist must produce. [2] What is the price that a profit maximising monopolist should charge? [2] Calculate the profit or loss that the profit maximising monopolist is making. (6] (iv) The monopolist tends to charge a price which is larger than the marginal cost. Do you observe this is in the above figure? Explain your answer. [S] (V) Would you say the above outcome is a long run or short run equilibrium phenomenon? Explain your answer. [5] (vi) Compared to pure monopoly, the demand curve for monopolistic competition is less clastic. Discuss whether this statement is TRUE or FALSE. [5]