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Suppose that a monopolist sells a product to consumers with an aggregate inverse demand that is downward sloping in quantity, P(Q) = 1, 000 − 4Q. The total cost of producing Q units is C(Q) = Q2 .
a) What is the unregulated price-quantity pair?
b) At this equilibrium, what are CS, PS, and W?
c) What price ceiling or floor maximizes W?
d) What are CS, PS and W at this equilibrium?
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