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9. State all the assumptions behind the Bain, Modigliani, Sylos-Labini model. Suppose that a monopolist faces...

9. State all the assumptions behind the Bain, Modigliani, Sylos-Labini model. Suppose that a monopolist faces a market demand function P = 16 – (0.72 + e x 0.01) x Q where e is the last digit of your student ID number. For example, if your student ID number is SB709394, then e = 4 and your market demand function will be P = 16 – 0.76 x Q. Suppose also that the total cost function is given by TC = 40Q – 12Q2 + Q3. Calculate the monopoly price level and the limit price if the entrant has the identical total cost function. Use diagrams to illustrate your answers.
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