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Q. 2) A monopolist faces following demand function for its product: Q = 45 - 5P fixed costs of monopolist are $12 and monopolist incurs variable costs of $5.00 per unit.
a) Illustrate what is profit-maximizing level of price and quantity for this monopolist? Illustrate what will profits be at this price and output level?
b) If government imposes a franchise tax on firm of $10, illustrate what will be profit-maximizing level of price, output and profits?
c) If government imposes an excise tax of 50 cents per unit of output sold, illustrate what is impact on profit-maximizing level of price, outputs and profits?d) If government imposes a ceiling of $6 on price of firm's product, illustrate what output will firm produce and illustrate what will be total profits?
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