Question: Consider an imperfectly competitive firm facing the following relations:

Demand curve P= 50- Q

TC= 20 + 4Q²

(a) Find the profit maximising price and output combination and the maximum profits.

(b) A tax of T=10Q is imposed by the government what will be the new profit maximising equilibrium?

(c) If instead there was a fixed lump-sum tax T=100 what difference would it make for profit maximisation?