Given an inverse demand function P = 485 – 5Q and the marginal cost curve MC = 5 – Q + Q². Determine the social optimal price and quantity.

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Economics

Given an (inverse) demand function P = 485 – 5Q and the marginal cost curve
MC = 5 – Q + Q². (Keep at least two decimal points in your calculations.)

  • Determine the social optimal price and quantity.
  • Find consumer and producer surpluses under the social optimal condition.
  • Determine the monopolistic price and quantity.
  • Find consumer and producer surpluses under the monopoly condition.
  • What is the dead weight loss caused by monopoly?