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In: Economics

A monopolist faces the following average revenue (demand) curve: P = 100 – 0.01Q Where Q...

  1. A monopolist faces the following average revenue (demand) curve:

P = 100 – 0.01Q

Where Q is weekly production and P is price, measured in cents per unit. The firm’s cost function is given by C = 50Q + 30,000. Assume that the firm maximizes profits.

  1. What is the level of production, price, and total profit per week?
  2. If the government decides to levy a tax of 10 cents per unit on this product, what will be the new level of production, price, and profit?

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Expert Solution

Rahul Sunny answered 3 years ago
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