4. A monopolist can produce at constant average and marginal costs of AC = MC =...

4. A monopolist can produce at constant average and marginal costs of AC = MC = 10. The firm faces a market demand curve given by P = 100 - Q.

(a) Calculate the profit-maximizing level of output and price for the monopolist. Also calculate the monopolist's profit.

(b) Assume this industry suddenly becomes perfectly competitive. Calculate the price and industry output if this industry is perfectly competitive.

(c) Calculate the deadweight welfare loss that the monopoly in (a) imposes on society.

Expert Solution

Rahul Sunny answered 1 year ago

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