Find the profit-maximizing output

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A monopolist faces the market demand, P = 4 - Q. The (total) cost of production is 2Q + Q2.

(a) Find the profit-maximizing output and price for the monopolist.

(b) The patent holder licenses two product market rivals and charges a royalty fee B. Find the optimal total output in this case. Discuss the effect of an increase in B on optimal quantities.

(c) If B = 1/3 , what is the maximum fixed fee F that each licensee can pay?

Reference no: EM131715177

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