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Monopoly has constant marginal cost

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Consider a monopoly who can do advertisement to inform and attract new customers (hence expands its potential demand). Let a denote the monopoly's expenditure on advertising. The market demand for the monopoly's product when it charges price p and invests a on advertising is D(p, a) = 120 - p +√a. The monopoly has constant marginal cost MC = 20.

Reference no: EM131168344

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