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Quiz 19 Monopoly - arising from this monopoly(c Suppose the...

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Shomu Banerjee ECON 201 MONOPOLY Trygve is a monopolist with a cost function given by C ( Q ) = 72 + 100 Q + 1 2 Q 2 facing an inverse market demand curve P = 700 - Q. It’s marginal cost is MC = 100 + Q . (a) Find his profit-maximizing price and output combination, P * and Q *, and his profit Π *. (b) What is the socially desirable level of output? Calculate the deadweight loss
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Unformatted text preview: arising from this monopoly. (c) Suppose the government decides to tax 30% of the monopolist's profit (a corporate tax ). Will he produce more or less than before? Give an economic explanation for your answer!...
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