Answer to Question #42227 in Microeconomics for JoJo

Question

A monopolist has the following cost and demand functions:
TC = 80 + 0.5Q² and P = 40 - 1.5Q

a) Calculate the profit maximizing price and quantity for the monopolist.

b) What output and price would prevail if this industry operated under perfect competition?

c) Draw the results from parts (a) and (b) above in a diagram and calculate the dead weight loss associated with the monopoly.

d) If the gains to producers from monopoly power could be redistributed to consumers, would the social cost of monopoly be eliminated? Explain.