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Suppose that market demand curve is described by y = 10 - p, and a Firms...

Suppose that market demand curve is described by y = 10 - p,

and a Firms cost function is C(y) = 10y - 2y^3/2

(a) Calculate and draw the marginal cost and the average cost curves.

(b) What is the total surplus maximizing output level? Can it be a competitive market equilibrium? Why or why not?

(c) Suppose that the Firm is the monopolist. How much does the monopolist want to produce? What is the market price? How much is the Monopolists Profit? What is the consumer surplus? Calculate them.

(d) Point out the above answers of (c) in a diagram that is drawn as accurate as possible. Point out the deadweight loss from having the monopolist.

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