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A monopolist faces demand given by: P = 100 - .4Qd, and has marginal costs given by: MC = 10 + .2Q
a. Draw demand, marginal revenue and marginal cost curves. Calculate and show how much this firm will sell and what they will charge.
b. Calculate producer surplus with monopoly and the consumer surplus with monopoly.
c. How much would be produced if this was a competitive market? what would be the price?
d. calculate teh consumer and producer surplus for a competitive market.
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An increase in government spending or An equal decrease in taxes if consumer confidence is lower than the previous month.
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