Under what conditions does monopoly arise? Under what conditions can a monopoly price discriminate? Use the following information to work Problems 2 to 4. Elixir Spring produces a unique and highly prized mineral water. The firm’s total fixed cost is $5,000 a day, and its marginal cost is zero. Table 1 shows the demand schedule for Elixir water. 2. On a graph, show the demand curve for Elixir water and Elixir Spring’s marginal revenue curve. What are Elixir’s profit-maximizing price, output, and economic profit? 3. Compare Elixir’s profit-maximizing price with the marginal cost of producing the profit-maximizing output. At the profit-maximizing price, is the demand for Elixir water inelastic or elastic? 4. Suppose that there are 1,000 springs, all able to produce this water at zero marginal cost and with zero fixed costs. Compare the equilibrium price and quantity produced with the price and quantity produced by Elixir water.