Question: ( a ) The monopolist faces a demand curve given by D ( p ) = 1 0 0 p . Its cost function is
a The monopolist faces a demand curve given by Dp p Its cost function is cyy What is its optimal level of output and price?
b A firm has a supply function given by Spp Its fixed costs are If the price changes from to what is the change in its profits?
c If average variable costs exceed the market price, what level of output should the firm produce? What if there are no fixed costs?
d If Dpp and cy y what is the optimal level of output of the monopolist?
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