Problem 11.1.6 The inverse demand curve that a monopoly faces is p = 10Q-05. The firm's cost curve is C(Q) = 5Q. What is the profit-maximizing quantity and price? (Hint: See Solved Problem 11.2.) M Problem 11.2.3 The U.S. Postal Service (USPS) has a constitutionally guaranteed monopoly on first-class mail. In 2015, it charged 49c for a stamp, which was not the profit- maximizing price-the USPS goal, allegedly, is to break even rather than to turn a profit. Following the postal services in Australia, Britain, Canada, Switzerland, and Ireland, the USPS allowed Stamps.com to sell a sheet of twenty 49c stamps with a photo of your dog, your mommy, or whatever image you want for $22 (that's $1.10 per stamp, or a 224% markup). Stamps.com keeps the extra beyond the 49c it pays the USPS. What is the firm's Lerner Index? If Stamps.com is a profit-maximizing monopoly, what elasticity of demand does it face for a customized stamp? (Hint: See Solved Problem 11.3.) M Problem 11.3.5 If the inverse demand curve is p = 120 - Q and the marginal cost is constant at 10, how does charging the monopoly a specific tax of t = 10 per unit affect the monopoly optimum and the welfare of consumers, the monopoly, and society (where society's welfare includes the tax revenue)? What is the incidence of the tax on consumers? (Hint: See Solved Problem 11.4.) M Problem 11.5.5 Bleyer Industries Inc., the only U.S. manufacturer of plastic Easter eggs, manufactured 250 million eggs each year. However, imports from China cut into its business. In 2005, Bleyer filed for bankruptcy because the Chinese firms could produce the eggs at much lower costs. Use graphs to show how a competitive import industry could drive a monopoly out of business. (Hint: Look at Solved Problems 11.6 and 11.7.)