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A monopolist's demand curve is described by Q = 50 - 0.5 P
The firm's cost function is TC = 10 + 2 Q
a) Find the profit-maximizing quantity and price.
b) If the industry is regulated in a way that requires it to set P = AC, how much will be sold and what will the price be?
c) If the industry is regulated in a way that requires it to set P = MC, how much will be sold and what will the price be?
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ADVANCED ANALYSIS Let MUA = z = 10 - x and MUB = z = 21 - 2y, where z is marginal utility per dollar measured in utils, x is the amount spent on product A, and y is the amount spent on product B. Assume that the consumer has $10 to spend on A and ..
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