Q3) A monopolist has the following demand and average cost functions:
p = 50 -x/3 and AC -0.5 + 10 + 400/x where p is price and x is
quantity.
O Find what is elasticity of demand when p = 30.
(1) Determine the level of output at which profit will be maximum.
(til) At that level of output, prove that elasticity of average cost is equal
to elasticity of total cost minus one.
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