As in Worked-Out Problem 17

Qd = 16000 - 200P

or 200P = 16000 - Qd

or P = 80 - 0.005Qd

Marginal Revenue = 80 - 0.01Q

TC = 20 Q + 0.01Q^2

Marginal Cost = 20 + 0.02Q

At MR = MC,

80 - 0.01Q = 20 + 0.02Q

or 0.03Q = 60

or Q = 2000

P = 80 - 0.005Q

or P = 80 - 0.005*2000

or P = 80 - 10 = 70

So the profit-maximizing Quantity is 2000 and the profit-maximizing price is 70

The graph can be drawn as

The deadweight loss is the area of the triangle ABC.

Point A: P = 70, Q = 2000. So the point is 2000,70

Point C: Q = 2000. MR = 80 - 0.01 * 2000 = 60

Point B: 80 - 0.005Q = 20 + 0.02Q

so 0.025Q = 60

or Q = 2400

P = 80 - 0.005*2400 = 68.

So the point is 2400,68

So the deadweight loss is =1/2 * (70 - 60) * (2400 - 2000) = 1/2 * 10 * 400 = 2000

PLEASE SEE THE ATTACHED FILE FOR THE COMPLETE SOLUTION.