Assume that the demand for electric cars is p = 100-q (where q is the quantity and p is the price), and that an innovation can reduce the constant marginal

Assume that the demand for electric cars is p = 100-q (where q is the quantity and p is the price), and that an innovation can reduce the constant marginal cost of production from 70 to 60. 1. is the definition of nondrastic/drastic innovation? 2. Confirm that the innovation for electric cars is nondrastic. 3. Show that marginalcost would have to be reduced to less than 40 for the innovation to be drastic. 4. Suppose that the industry is a monopoly (not threatened by entry). How much is this firm willing to pay to acquire the innovation?

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