Question: 3. (34 points) Suppose a monopolist has a production function given by Q = Ll'lKl-z. Therefore, K132 L12 MP = ,andMP = , L 2

3. (34 points) Suppose a monopolist has a production function given by Q = Ll'lKl-"z. Therefore, K132 L12 MP = ,andMP = , L 2 K 2x1- LI :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 = 144 2Q. a] [8 points} What is the monopolist's total cost function? b] [4 points} How much output should the monopolist produce in order to maximize prot? c] (6 points} How much labor should the firm hire to produce this output? d) [4 points} How Much Capital should the rm hire? c] (4 points} What price should the monopolist charge? I} (4 points) What is the deadweight loss? 3] [4 points} What is the Price Elasticity of Demand at the prot-maximizing price and quantity

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