Monopoly’s marginal cost is constant and equal to c. monopoly demand function given by D(p) = 180 – p. After maximizing profit, quantity of 80.
a) Illustrate graphically the monopoly’s profit maximization.
b) Calculate the monopoly’s marginal cost c.
c) Calculate the monopoly’s profit in case it has a fixed cost of 1400.
d) Calculate the social welfare (or deadweight) loss caused by the monopoly (not taking into account the monopoly’s fixed cost).