Where q is quantity p is the price and a is its level of


The inverse demand a monopoly faces is
p = 100 + Q + A^05;
where Q is quantity, p is the price, and A is its level of advertising. Its marginal cost of production is constant at $10, and its cost of a unit of advertising is $1.

(a) Write down the monopolist's profit equation.
(b) Solve for the monopolist's prot-maximizing price, quantity and level of advertising.

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Econometrics: Where q is quantity p is the price and a is its level of
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