$$Dayna$\text{'}$s Doorstops,$$ Inc.$($DD$),$ is a monopolist in the doorstop industry. Its cost is

Upper C equals $25$ minus $5$ Upper Q plus Upper Q squaredC$=255$Q$+$Q$2$

and demand is

Upper P equals $190$ minus $2$ Upper QP$=1902$Q

$($Unless

$$otherwise$$ instructed, rounded all answers to two$$ decimal$$

places$.)$

$1.$ What output does the firm produce to$$ maximize$$ profit? What price should$$ DD$$ set? How much profit does the$$ firm$$ generate? What is$$ consumer$$ surplus? What is$$ producer$$ surplus?

To$$ maximize$$ profit, DD should produce

enter your response here

units of output.

The firm should set a price of

$$$enter your response here.

Profit equals

$$$enter your response here.

Consumer surplus is

$$$enter your response here.

Producer surplus is

$$$enter your response here.

$2.$ What would the$$ output, price,$$ profit, consumer surpus and producer surplus be if DD acted like a perfect competitor and set$$ MC$=$P$?$ What is the deadweight loss from monopoly$$ power$$ above?

To maximize profit as a perfectly competitive$$ firm$$ would, DD will produce

enter your response here

units.

The market price will be

$$$enter your response here.

Profit will be

$$$enter your response here.

Consumer surplus will be

$$$enter your response here.

Producer surplus will be

$$$enter your response here.

The dadweight loss of the mononoly outcome in part $1$ is

enter your response here.

$3.$ If the government would like to address the monopoly power by setting a price ceiling on$$ doorstops, what is the optimal price ceiling that the government should$$ choose?

The government shouLd set the price cieling at

$$$enter your response here.