3.(30 marks). Consider the production of a monopolist firm under the inverse market demand function p = 305 – 0.3q, wher

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3 30 Marks Consider The Production Of A Monopolist Firm Under The Inverse Market Demand Function P 305 0 3q Wher 1 (95.88 KiB) Viewed 34 times

3.(30 marks). Consider the production of a monopolist firm under the inverse market demand function p = 305 – 0.3q, where q is the quantity the consumers demand under the price pp. The inverse supply curve is the firm's MPC (marginal private cost) equaling 5+ 0.6q where q stands for the quantity the firm produces. This firm's product causes serious pollution to the water nearby, resulting in the MSC (marginal social cost) equaling 5 + 1.2q. (i).(15 marks) Find the social optimal output of the firm. (ii). (15 marks) Find the value of the dead weight loss (DWL) if nothing is done to address the problems.