Question: questions] A monopoly firm faces an inverse demand function like p=100-Q. The firm's cost curve is C(Q)=50+5Q. a) What is the profit-maximizing solution? Calculate the

questions] A monopoly firm faces an inverse demand function like p=100-Q. The firm's cost curve is C(Q)=50+5Q. a) What is the profit-maximizing solution? Calculate the optimal price and quantity. b) Intuitively explain how your answer changes if C(Q)=100+5Q? c) Graphically show or explain why after an increase in the demand curve, a monopoly's price may stay constant, but its output may increase. d) Imagine subsidy is granted to each firm operating in the monopolistic competitive market which leads to decrease in their FC of production. What is the effect of this government policy in the prices and the number of firms in the market? Why? Explain. A * B I FF E E E #

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