3. Think about a monopolist, the market demand function is: QD = 100/P?, the monopolist's cost function is: C(Q) = 2Q, %3D %3D dQp/Qp а. Based on the definition of price elasticity of demand: ep,p =...

Extracted text: 3. Think about a monopolist, the market demand function is: QD = 100/P?, the monopolist's cost function is: C(Q) = 2Q, %3D %3D dQp/Qp а. Based on the definition of price elasticity of demand: ep,p = what is the dP/P price elasticity of the market demand curve in this case? b. What is the monopolist's optimal price based on the inverse elasticity rule? c. If the government decide to impose a $1 per unit tax on the output, please use the inverse elasticity rule to decide if the monopolist's optimal price will increase more than $1 after the tax