Question: Consider ademand function for a monopolist is P = 30 - 0.75Q; total costs are TC = 20 + 9Q + 0.3Q2; marginal revenue is

Consider ademand function for a monopolist is P = 30 - 0.75Q; total costs are

TC = 20 + 9Q + 0.3Q2; marginal revenue is MR = 30 - 1.5Q; and marginal cost is MC = 9 + 0.6Q.Answer the following questions;

a)What is theprofit-maximizing level of output?[6 marks]

b)Calculate the monopolist welfare loss (WL), where WL=1/2*1/,and represent price elasticity of demand. [4 marks)

c)Use the Lerner index to measure the level of market power. [5 marks]

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