Calculate the profit-maximizing monopoly quantity

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A monopolist faces a demand curve P = 210 - 4Q and initially faces a constant marginal cost MC = 10.

a) Calculate the profit-maximizing monopoly quantity and compute the monopolist's total revenue at the optimal price.

b) Suppose that the monopolist's marginal cost increases to MC = 20. Verify that the monopolist's total revenue goes down.

c) Suppose that all firms in a perfectly competitive equilibrium had a constant marginal cost MC = 10. Find the long-run perfectly competitive industry price and quantity.

d) Suppose that all firms' marginal costs increased to MC = 20. Verify that the increase in marginal cost causes total industry revenue to go up.

Reference no: EM131248335

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