The following table shows the demand curve facing a monopolist who produces at a constant marginal cost of $10.

Price Quantity

27 .......... 0

24 .......... 2

21 .......... 4

18 .......... 6

15 .......... 8

12 ..........10

9 ...........12

6 ...........14

3 ...........16

0 ...........18

a. Calculate the firm’s marginal revenue curve.

b. What are the firm’s profit-maximizing output and price? What is its profit?

c. What would the equilibrium price and quantity be in a competitive industry?

d. What would the social gain be if this monopolist were forced to produce and price at the competitive equilibrium? Who would gain and lose as a result?