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1. A monopolist has a total cost function c(q) = 20 +4q. The inverse demand function is given by p = 40-3q.
a. If the monopolist is maximizing his profits what will the price charged and quantity exchanged be?
b. What are the monopolist's profits when he is maximizing his profits?
c. Now suppose the government tries to regulate the monopolist and forces him to set p = MC. How much profit is the monopolist making at this point?
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