Consider a monopolist with the following demand and cost function: Demand: P = 200 -0.10 Cost: C = 50,000+20Q+0.025Q² a. What is the profit maximizing quantity the firm should produce and what is demand elasticity at that quantity? b. What would be the socially efficient level of output and what per-unit subsidy would the government have to give consumers so that the socially efficient level of output is realized?

Consider a monopolist with the following demand and cost function: Demand: P = 200 -0.10 Cost: C = 50,000+20Q+0.025Q² a. What is the profit maximizing quantity the firm should produce and what is demand elasticity at that quantity? b. What would be the socially efficient level of output and what per-unit subsidy would the government have to give consumers so that the socially efficient level of output is realized?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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