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Demand for microprocessors is given by P=35 - 5Q where Qis quantity of microchips in millions. The typical firm’s total cost of producing a chip is Ci=5qi where qi is the output of firm i.
A. Suppose that one company acquires all the suppliers in the industry and thereby creates a monopoly. What are the monopolist's profit maximizing price and total output?
B. Compute the monopolist's profit and the total consumer surplus of purchasers.
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