the typical firm. Question 6 (Monopoly) Assume that a Monopoly Market can be described by the following equations: P = 200 - Qd (Demand) P = 20 + Qs (Supply = MC for the Monopolist) The Marginal Revenue for the Monopolist is: MR = 200 -2Q a) What are the main characteristics of a Monopoly? b) Calculate the output and price that the Monopoly will set to maximize profits. c) Make a graph illustrating the output and price that the Monopoly will set to maximize profits. Question 7 a) What is a Market Failure? b) List and discuss 5 issues that can lead to Market Failure. c) Assume that a Market can be described by the following equations: P = 2,000 - Qd (Demand) P = 1,000 + Qs (Supply) MSB = 3,000 - Qd (Marginal Social Benefit due to Positive Externality) c.1) Calculate the equilibrium price and output in the market. c.2) What is the Socially optimal amount of output