D1:Q = 6 - 0.5P

Q P=D

0 12

1 10

2 8

3 6

4 4

5 2

6 0

a.Find the profit-max P & Q and profit for Demand 1:

i.(2pts) Find the equation for marginal revenue (MR).

ii.(2.5pts) Calculate the profit-maximizing level of output for this firm and find the price they will charge.

iii.(2pts) What is the mark up?Calculate the Lerner Index (P-MC)/P value for this firm.Do they have a lot of market power?Explain.

iv.(1pt) Calculate the total revenue that this firm earns from selling to type 1 customers.

v.In Excel, in column C, put in the equation for MR

vi.In column D, put the MC=0.

vii.(1pt) Graph the demand curve, MR, and MC.Title and label your graph.Set the min on the vertical axis to -5 and the major unit to 5.Does your graph support your calculations above?Explain.

viii.(4pts) Insert your graph here: