Question: Suppose that a monopolist faced the following demand curve (data below) for its goods. Its marginal cost per unit of production is 50, and it faces no fixed costs.

a. Calculate the profit-maximizing output and price.

b. Suppose the workers negotiate a health insurance benefit increase that increases marginal cost per unit from 50 to 60. Calculate the new profit-maximizing output and price.

c. Who bears the costs of the benefit increase? Why?