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Can someone help me solve this problem? I've been trying but haven't been able to figure it out.
A monopolistically competitive company assembles and installs solar panels it imports at $10 per unit. All remaining costs of the company, denoted RC, is given by the following (where Q is a unit of solar panel): RC(Q) = 1,000+5Q2. The demand faced by this company is given by P=500-30Q.
a) What is the optimal production level, Q*, and what is the profit at Q*?
b) A 30% tariff is imposed on imported solar panels. Assuming demand stays the same, what would be the new Q* and P(Q*)?
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