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Coca is a monopolist for a new drug that makes people feel thinner. The total cost...

Coca is a monopolist for a new drug that makes people feel thinner. The total cost function is C(Q) = 200 + 10Q + Q 2(read as Q squared or Q to the power of 2) . The inverse demand function is p(Q) = 82 − Q.

(a) By how much do revenues increase if Coca sells one more (small) unit of output? By how much does its cost go up if it produces one more (small) unit of output? (3 points)

(b) What is the optimal price and quantity the monopolist should charge / sell? (4 points)

(c) What is the profit the monopolist makes? Should the firm shut down in the short or long run? (3 points)

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