What is the optimum and sustainable price

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4.  Assume a monopolist faces a market demand curve P = 100 - 2Q and has the short-run total cost function C = 640 + 20Q.
If the government imposed a maximum price on the monopolist equal to the competitive price, how would this affect total welfare? Is this policy sustainable in the long run? What is the optimum and sustainable price ceiling the government could impose?

Reference no: EM13671055

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