A monopolist has a cost function given by c(y) = y2 and faces a demand curve given by P(y) = 120 − y.
(a) What is its profit-maximizing level of output? 30. What price will the monopolist charge? ______.
(b) If you put a lump sum tax of $100 on this monopolist, what would its output be? ______.
(c) If you wanted to choose a price ceiling for this monopolist so as to maximize consumer plus producer surplus, what price ceiling should you choose? ______.
(d) How much output will the monopolist produce at this price ceiling? ______.
(e) Suppose that you put a specific tax on the monopolist of $20 per unit output. What would its profit-maximizing level of output be? ______.