HEYTEA has a monopoly on Bubble Tea in city A's local market. The demand is: Q=220-4P....

 

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HEYTEA has a monopoly on Bubble Tea in city A's local market. The demand is: Q=220-4P. The resulting marginal revenue function is: MR-55-Q/2. HEYTEA's marginal cost of producing bubble tea is: MC(Q)=7+Q/4. a. Calculate HEYTEA's profit maximizing output and price. Find out the consumer surplus and the producer surplus. b. Calculate the social cost of HEYTEA's monopoly power. HEYTEA has a monopoly on Bubble Tea in city A's local market. The demand is: Q=220-4P. The resulting marginal revenue function is: MR-55-Q/2. HEYTEA's marginal cost of producing bubble tea is: MC(Q)=7+Q/4. a. Calculate HEYTEA's profit maximizing output and price. Find out the consumer surplus and the producer surplus. b. Calculate the social cost of HEYTEA's monopoly power.