Question. Firm A is the sole supplier of a certain product. A's marginal cost equals average cost MC = AC = 30, and it faces market demand given by inverse demand function P = 120 0:5Q. Suppose at the moment A produces quantity q = 120 units at price p = 60.
(a) Does rm A maximizes pro t at current price and quantity? Explain.
(b) Is there any dead weight loss at current price and quantity? How much?
(c) What is the monopoly dead weight loss?