Suppose a firm’s inverse demand curve is given by P  = 120  - .5Q and its cost equation is C  = 420 +  60Q  + Q2. a. Find the firm’s optimal quantity, price, and profit (1) by using the profit and marginal profit equations and (2) by setting MR equal to MC. Also provide a graph of MR and MC. b. Suppose instead that the firm can sell any and all of its output at the fixed market price P   120. Find the firm’s optimal output.

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