Suppose a monopolist in a small town faces a market demand curve given by QD = 1000 10p and has a constant marginal cost, MC = 20. Assume the monopolist is operating in the long-run.

a. Find the monopolist's profit-maximizing quantity and price. Show it on a diagram. Calculate the profit.

b. Calculate the DWL in the market and explain.

c. Suppose there is another town locates nearby. An inverse demand curve of this town for the good produced by the monopolist is given by p = 50 1 / 5Q. Are these consumers served by the monopolist? Explain. In what circumstances, the residents of another town could be served by the monopolist?