Question: Exercise # 1 . Suppose a competitive market with the inverse demand ( p = 1 0 0 - 2 q )

Exercise \#1. Suppose a competitive market with the inverse demand \( p=100-2 q \). The preinnovation marginal cost is constant at 60. A process innovation reduces the marginal cost to 28.
Q1) Determine the price set by a monopoly using the innovation.
Q2) Determine the minimal reduction in marginal cost for the innovation to be drastic.
Exercise \ # 1 . Suppose a competitive market

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