Question: Cutting Edge Pharmaceuticals Pty Ltd (a monopoly rm) has the following demand (average revenue) function: AR = 65 Q The marginal cost of production is

Cutting Edge Pharmaceuticals Pty Ltd (a monopoly rm) has the following demand (average revenue) function: AR = 65 Q The marginal cost of production is constant and equal to $5. a) What is the equation for the MR function? (Hint: MR falls twice as fast (at twice the rate) as AR) Determine the prot maximizing level of output (Qm) for the Monopoly rm b) What is the equilibrium monopoly price (Pm) set by the rm and what will be the monopoly profit earned? c) Illustrate and label the market demand and marginal cost, average cost of this rm as well as, profit maximizing price and quantity and prot level on a diagram

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