The inverse demand curve for a monopolist changes from P = 200 - 0.25Q to P = 180 - 0.25Q, while the marginal cost of production remains unchanged at a constant $90. After the change in the demand curve, the price falls _____ and the output falls by _____.

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The inverse demand curve is a downward sloping curve that shows the relationship between the price of a good and the quantity demanded. The slope of the inverse demand curve is negative, which means that as the price of a good increases, the quantity demanded decreases.The marginal cost of production is the cost of producing one additional unit of output. In this case, the marginal cost of production is constant at $90.The profit-maximizing monopolist will produce the quantity of output where marginal cost equals marginal revenue. Marginal revenue is the change in total revenue that results from selling one additional unit of output.The inverse demand curve is a downward sloping curve, which means that marginal revenue is also a downward sloping curve. The marginal cost curve is a horizontal line, which means that marginal cost is constant.The profit-maximizing monopolist will produce the quantity of output where the marginal cost curve intersects the marginal revenue curve.After the change in the demand curve, the inverse demand curve shifts down. This means that the marginal revenue curve also shifts down. The profit-maximizing monopolist will now produce a lower quantity of output where the marginal cost curve intersects the new marginal revenue curve.The price will fall by $10 and the output will fall by 40 units.

The Inverse Demand Curve for a Monopolist Changes from P