1.3 Suppose that a monopolist faced the following demand curve for its goods. Its marginal cost per unit of production is 100, and it faces no fixed costs.

a Calculate the profit- maximizing output and price.
b Suppose the workers negotiate a health insurance benefit increase that increases marginal cost per unit from 100 to 120. Calculate the new profit- maximizing output and price.
c Who bears the costs of the benefit increase? Why?

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Price Quantity 200 100 180 200 160 300 140 400 120 500 100 600 80 700 60 800 40 900 20 1,000 0 1,100