QUESTION 3: Monopolies The demand and total cost functions for a monopoly firm are: Q(P) = 39.5 – 0.5P TC(Q) = 60 – Q + 0.5 Q2 a) Plot the demand, marginal revenue, marginal cost, and average total cost curves, including the intersections with the horizontal and vertical axes.  b) What are the profit maximising QM and PM for this firm? c) What is the firm’s profit πM?  d) What are the firm's fixed and variable costs?  e) What would be the socially optimal Q* and P* (round to 1 decimal place if needed)?

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