A firm operating in a monopolistically competitive market faces demand and marginal revenue curves as given below:
P = 10 - 0.1Q MR = 10 - 0.2Q
The firm's total and marginal cost curves are: 
where P is in dollars per unit,output rate Q is in units per time period,and total cost C is in dollars.
a.Determine the price and output rate that will allow the firm to maximize profit or minimize losses.
b.Compute a Lerner index.
Definitions:
Design Defect
A flaw in the design of a product that makes it unsafe for its intended use.
Ordinary Consumer
The average person who purchases goods or services for personal use, not for manufacture or resale.
Product Liability Laws
Regulations that hold manufacturers, distributors, suppliers, and retailers accountable for any injuries caused by defective or dangerous products.
National Sales
Sales activities that are conducted within a country's borders, focusing on the distribution and marketing of goods and services to domestic consumers.
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