Suppose that a monopoly seller knows that his demand curve is linear, and knows that at a price of $40, he sells five units, while at a price of $25, he sells 10 units.
a. Find the equation for the monopolist’s demand curve. Now find the equation or his marginal revenue curve.
b.If each potential consumer buys only one unit, what is the reservation price of the consumer with the greatest willingness to pay?
c. Suppose that each consumer will buy a second unit at a price $8 below the price at which they purchase just one. How many units will be sold at a price of $34? (Use whole dollar amounts)