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Monopolistic
a. Discuss a monopolistic market structure and the necessary assumptions for it to exist?
b. Discuss why a monopolistic firm realize normal profits in the long run and illustrates by use a graph
Suppose a firm's inverse demand curve is P = 100 - Q and its marginal cost is constant at $20. Show that the value of the Lerner index at the profit-maximizing quantity is 0.67. Find the corrisponding price elasticity of demand.
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