What subsidy is necessary to induce monopolist

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Reference no: EM133661703

Problem: A monopolist has a demand curve given by: P = 100 - Q and marginal cost curve is given by P = 2Q. Find the profit-maximizing quantity of production and price. Draw a graph to show the consumer surplus, producer surplus. Calculate the area of dead-weight loss and indicate it on the graph. What subsidy is necessary to induce the monopolist to produce the socially optimal level of output?

Reference no: EM133661703

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