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1. A monopolist faces the industry demand Q=400-0.5 p and has constant marginal costs of 8, with no fixed costs.
a) What is the monopoly price? What is the monopoly quantity?
b) Without solving mathematically, just using economic theory based on the solution in a), if price drops such that quantity increases from the one in a), by one very small amount, would total revenue be higher?
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1. A monopolist faces the industry demand Q=400-0.5 p and has constant marginal costs of 8, with no fixed costs. a) What is the monopoly price? What is the monopoly quantity?
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