P Q TR 18 17 16 15 14 0 1 2 3 4 13 5 12 11 10 9 8 6 7 8 9 10 MR 017 32 45 56 65 72 77 80 81 80 MC VC FC 17 15 13 11 9 7 5 3 1 -1 3 3 3 3 3 3 3 3 3 3

Show this problem graphically by graphing the demand curve, MR, and MC, labeling everything relevant, including the equilibrium price and quantity. Show consumer an producer surplus. Also show the deadweight loss of monopoly (hint: extend the linear demand curve down to the x-axis). How much would the3 firm produce if it was owned by the government and trying to maximize economic efficiency (make total surplus as big as possible) Finally, assume this demand curve is representative of demand for any U2 CD. What is the most money U2 could ask for in order to make their next CD that would still allow the firm to produce the CD? How do fixed costs affect the firm's decisions on price and quantity? What is the minimum amount of economic a firm needs to still make the product? Therefore, how much could U2 make while still allowing the studio to stay in business?