Assume a monopolist faces a market demand curve ?=50−1/2? and has the short run total cost...

Assume a monopolist faces a market demand curve ?=50−1/2? and has the short run total cost function C=640+20Q. What is the profit-maximizing level of output? What are profits? Graph the marginal revenue, marginal cost, and demand curves, and show the area that represents deadweight loss on the graph. In the question above, what would price and output be if the firm priced at socially efficient (competitive) levels? What is the magnitude of the deadweight loss caused by monopoly pricing?

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Rahul Sunny answered 1 year ago

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