Suppose the monopolist in Problem 12.6 incurs a marginal cost of 5.50 euros for every unit it produces. The firm has no fixed costs.

a) How many units will it produce if it wants to maximize its profit? (Remember, it must produce whole units.)

b) What will its profit be when it maximizes profit?

c) What will the deadweight loss be when it maximizes profit? Explain.

 

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