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  3. 2 suppose that a good has market demand q ...

Question: 2 suppose that a good has market demand q ...

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2. Suppose that a good has market demand Q = p^(-2). The good is produced by a monopolist having cost function c (Q) = Q

(a) Find the quantity and price maximizing the monopolist's profit.

(b) Suppose now that the government imposes a tax of t on each unit sold. Find the quantity and price maximizing the monopolist's profit.

(c) Compute the welfare loss from the tax.

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