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QUESTION
1)True/False: Monopoly reduces social welfare, so the government should always prohibit
1)True/False: Monopoly reduces social welfare, so the government should always prohibit
monopoly(explain)
2)Assume the demand for GMs new Hummer H2 is P = 100000 - 500Q, the marginal revenue is MR = 100000 - 1000Q, and the marginal cost is MC = 600Q. a) Please figure out the profit maximizing P and Q. b) What is the consumer surplus and what is the producer surplus?
