Q1. Consider the following graph for a pure monopoly firm selling electricity. Price 20.17 18.17 16.87 15.87 6.57 0 ATC MC K 20 25 30 35 Demand Quantity (a)What are the profit maximization output and price? How much is the profit? (b)Suppose the demand for electricity increases due to the unusually cold weather. Would the profit maximizing output increase or decrease? What about the price?

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