Find the monopolist’s profit-maximizing output and price

Solve the problem5. [Appendix Exercise] For each of the following technologies, graph a representative set ofisoquants:a. Every worker requires exactly one machine to work with; no substitution is possible.b. Capital and labor are perfect substitutes.c. The firm is able to substitute capital for labor, but they are not perfect substitutes.6. [Appendix Exercise] A firm pays $10 per unit of labor and $5 per unit of capital.a. Graph the isocost curves for TC = $100, TC = $200, and TC = $500.b. Suppose that the cost of capital increases to$10. Graph the new isocost curves.5. In a perfectly competitive industry, the market price is $25. A firm is currently producing 10,000 units of output, its average total cost is $28, its marginal cost is $20, and its average variable cost is $20. Given these facts, explain whether the following statements are true or false:a. The firm is currently producing at the minimum average variable cost.b. The firm should produce more output to maximize its profit.c. Average total cost will be less than $28 at the level of output that maximizes the firm’s profit.Hint: You should assume normal U-shaped cost curves for this problem.3. Suppose the demand curve for a monopolist is QD = 500 – P, and the marginal revenue function is MR = 500 – 2Q. The monopolist has a constant marginal and average total cost of $50 per unit.a. Find the monopolist’s profit-maximizing output and price.b. Calculate the monopolist’s profit.c. What is the Lerner Index for this industry?