Question 2 (25 marks) Faceboots is a monopolist in the local market of boots. The inverse market demand is given by P = 100 - Q where P and Q are the market price and quantity of (pairs of ) boots, respectively. The cost function of producing Q units is given by the cost function C(Q) = Q2. (a) (5 marks) Find the profit-maximising price, and quantity, AND compute the monopolistic profit for FacebootsT (b) (5 marks) Measure the price influence of Faceboots" as a monopolist. (c) (5 marks) What quantity would be produced if instead Faceboots" cannot set and/ or influence the market price at all? (d) (5 marks) Draw the (inverse) demand curve (with P in the vertical axis and Q in the horizontal axis). Comparing the slope of the ray from the origin and the slope of demand, determine whether the demand curve is elastic, inelastic or unit-elastic at the quantity you found in part (a). (Do not answer this part by computing the price elasticity.) (e) (5 marks) Suppose that now Faceboots" is charged a fixed license fee $F to operate in this monopolistic market. The amount $F of this fee does not depend on the amount of production Q. How does this fee affect the profit-maximising level of output? Explain