Question 3 (25 marks) Consider firm M, a monopolist for an effective medication. The total cost curve for producing units of the medication is given by TC(Q) = 17 + 20 + Q'. After doing market research, M learns that the aggregate demand curve for units of the medication is D(p) = 14 - p. (a) (1 mark) Determine the formula for M's marginal cost curve. (b) (1 mark) Determine the formula for the inverse aggregate demand curve. (c) (1 mark) Determine the formula for M's marginal revenue curve. (d) (1 mark) If M wanted to maximise the total revenue from the medication, how many units of the medication would M sell? Briefly explain. (e) (6 marks) Determine the short-run profit maximising price podo and quantity Qudon for firm M. Make sure that in your answer, you explain all steps of the three-step procedure for finding a monopolist's short-run profit maximum that we discussed in class. (f) (7 marks) In a figure with Q on the horizontal axis, draw the aggregate demand, marginal revenue and marginal cost curves. Make sure to label all curves. In your figure, also mark and label Quon, pofor, producer surplus (PS), consumer surplus (CS) and deadweight loss (DW L). (g) (1 mark) What are M's profits? (h) (3 marks) Calculate CS. PS and DW L. (i) (2 marks) What would be the market price p* and quantity Q" (in the short run) if firm M would be forced to act as a price taker? In this case, would firm M make a loss? If yes, how much of a loss? (j) (1 mark) What would be the total surplus in the short run in the market for the medi- cation if firm M would be forced to act as a price taker? (k) (1 mark) What would be the total surplus in the long run if firm M acted as a price maker but the government imposed a price ceiling of p*? Briefly explain