Question: Consider a monopoly that faces the demand curve

P = 20 – Q so that MR = 20 – 2Q

and had zero total costs so that MC = AC = 0.

1. Determine and illustrate this monopoly’s equilibrium output, price, markup, and profit if the government imposes a price ceiling of 12 on the monopoly (i.e., P 12). (3 points)
2. Determine and illustrate this monopoly’s equilibrium output, price, markup, and profit if the government, alternatively, imposes a price ceiling of 6 on the monopoly (i.e. P 6). (2 points)

Price: $2.99

Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document