Question: 3. (34 points) Suppose a monopolist has a production function given by Q = L^1/2 * K^1/2. Therefore, MP L = (K^1/2) / (2L^1/2) and

3. (34 points) Suppose a monopolist has a production function given by Q = L^1/2 * K^1/2. Therefore, MP L = (K^1/2) / (2L^1/2) and MP K = (L^1/2) / (2K^1/2)

The monopolist can purchase labor, L at a price w = 16, and capital, K at a price of r = 9. The

demand curve facing the monopolist is P = 288 - 2Q.

f) (4 points) What is the deadweight loss?

g) (4 points) What is the Price Elasticity of Demand at the profit-maximizing price and quantity?

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3. What is my goal?

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