The inverse demand curve a monopoly faces is 

1. What is the profit-maximizing quantity and price?

P = 120 - Q

C (Q) = 50 + 5Q, therefore, MC = 5

Revenue = PQ

= (120 - Q) Q = 120Q - Q^2

MR = 120 - 2Q

The profit maximization implies that MR = MC, so,

120 - 2Q = 5

Q = 57.5

Substituting Q for P,

P = 120 - Q

P = 120 - 57.5

P = $62.5

2. What is the firm's economic profit?

Economic Profit = Revenue - Cost

= (120 - Q) Q - 50 + 5Q

= (120 - 57.5) 57.5 - 50 + 5 (57.5)

= $3593.75 - $337.5

Economic Profit = $3256.25

3. How does your answer change if C(Q) = 150 + 5Q

A change in the total cost has no effect on the equilibrium price and quantity. The marginal cost is constant at $5 and is similar before. The profit maximization rule is still the same at MR = MC. However, the economic profit in this situation has changed due to changes in the fixed costs.

Economic Profit = Revenue - Cost

= (120 - Q) Q - 150 + 5Q

= (120 - 57.5) 57.5 - 150 + 5 (57.5)

= $3593.75 - $437.5

= $3156.25

The answer to this question is letter C, which has no effect on the equilibrium price and quantity, but profit will decrease.