Profit maximization
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Profit maximization
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Assume a monopolist faces a market demand curve P = 100 - 2Q and has the short-run total cost function TC = 640 20Q.1. Calculate the profit-maximizing level of output.2. Calculate the profit.3. Draw the marginal revenue, marginal cost, and demand curves, and show the area that represent deadweight loss on the graph.4. Using an appropriate diagram, explain why there is no market supply curve under conditions of monopoly.
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