Instructions: 1. Please provide your solution, explanation and drawing for every single question, in the space provided under the question. 2. Please write clearly. If your answers are not readable, then it will have zero points. 3. Graphs: Please label the axes, lines, curves and areas correctly. Graphs with no labels will not receive any points.

Q.3. A monopoly faces the market demand, = 600 2 where is the price of the product and is the quantity demanded. The total cost of production of the monopoly is = 500 + 2 . a. Calculate the profit maximizing output level and price of the monopoly. Calculate the profit.

b. Government imposes a unit tax of $180 on consumers which shifts the demand curve down to, = 420 2. Calculate the price paid by the consumers and price received by monopoly. Calculate also after-tax profit of the monopoly.

c. Calculate the tax revenue.