A monopolist faces a market demand curve given byQ = 70 – p.a. If the monopolist can produce at constant average and marginal costs of AC = MC = 6, what output level will the monopolist choose in order to maximize profits? What is the price at this output level? What are the monopolists profits?b. Assume instead that the monopolist has a cost structure where total costs are described by C(Q) = 0:25Q2- 5Q + 300. With the monopolist facing the same market demand and marginal revenue, what price-quantity combination will be chosen now to maximize profits? What will profits be?c. Assume now that a third cost structure explains the monopolists position, with total costs given byC(Q) = 0.0133Q3- 5Q + 250. Again, calculate the monopolists price-quantity combination that maximizes profits. What will profit be? Hint: Set MC = MR as usual and use the quadratic formula to solve the second-order equation for Q.d. Graph the market demand curve, the MR curve, and the three marginal cost curves from parts (a), (b), and (c). Notice that the monopolists profit-making ability is constrained by (1) the market demand curve (along with its associated MR curve) and (2) the cost structure underlying production.

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