Question: A firm called Mili-Tech is a monopolist in the production of an intricate electronic device used in the construction of military tanks. It faces monthly market demand that varies according to the equation Q=920-0.1P, where P is the price per device in dollars. The firm earns marginal revenue according to the equation MR=9200-20Q and incurs marginal costs according to the function MC=5240+2Q, where Q is the quantity of these devices produced.

1. How many of these devices will Mili-Tech produce per month to maximize profit? What price will the firm charge per device?
2. If Mili-Tech incurs total costs according to the equation TC=82400+5240Q+Q^2, how much economic profit (or loss) will it earn selling this product in a typical month?
3. Use the "algebraic formula" for elasticity to show that Mili-Tech produces a level of output where demand is relatively elastic.
4. At which level of output is the demand for this product unit elastic?
5. At the profit-maximization point, is Mili-Tech allocatively efficient? Explain.

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