(i) A monopolistic firm with a linear demand curve finds that it can sell two
units at Sh.12 or twelve units at Sh.2. Its fixed cost is Sh. 20 and its
marginal cost is constant at Sh. 3 per unit
Derive and plot the following:
Marginal cost, average total cost, marginal revenue and demand curves for this firm.
(8 marks)
(ii) At what output level will this firm produce? (4 marks)