Question 4 A monopolist faces the following demand curve. P = 120 0.02Q where Q is weekly production and P is price, measured in cents per unit. The firm's cost function is given by T C(Q) = 60Q + 25, 000 MC(Q) = 60

1. What is the level of production, price and profit per week? 2. Suppose the MC of the firm increases by 14. What will be the new level of production, price, and profit? 3. Suppose the government wants to set a price ceiling that induces the monopolist to produce the efficient level of output. What price will accomplish this goal?