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A monopolist faces the following demand curve:
Q = 144/P2
where Q is the quantity demanded and P is price. Itsaverage variable cost is
AVC = Q1:
2and its fixed cost is 5.
a. What are its profit-maximizing price and quantity? What is the resulting profit?
b. Suppose the government regulates the price to be no greater than $4 per unit. How much will the monopolist produce? What will its profit be?
c. Suppose the government wants to set a ceiling price that induces the monopolist to produce the largest possible output. What price will accomplish this goal?
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what single sum of money at t6 is equivalent to the following cash flow profile if i10?nnbspnbspnbspnbsp
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