Travel Light Incorporation (72) is a producer of backpacks. Its cost function is C= 100 - 50+ Q, and its (inverse) demand function is P= 55 - 2Q. a. What price should 72 set to maximize profit in a competitive market? What output does the firm produce? How much profit and consumer surplus does TZ generate? (6 points) b. Suppose the government sets the maximum price at $12. What will this do to quantity, consumer surplus, profit, and deadweight loss? [Hint: to calculate the consumer surplus, profit and deadweight loss you have to take into account the quantity produced at the maximum price]. (10 points) c. Is TL going to produce in the short run? What about the long run? Explain briefly. (4 points) Dimensione massima del nuovi file: 50MB