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A monopoly has the market demand Q = 1000-1000P, with a marginal cost, MC = 0.28.
a) What is the optimal price and quantity for perfect competition?
b) What is the optimal price and quantity for monopoly?
c) Find the resulting Dead Weight Loss (DWL) from the monopoly.
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Can we say confidently whether good X is a normal good or an inferior good.
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Think our company should take advantage of economies of scale by increasing our output, thereby spreading out our overhead costs.
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