1 The inverse demand to cross a river is given by P = 8 − Q, where P is the asking price for a passage. Standing Bridge monopoly connects the two shores. The monopoly cost is fixed: C(Q)= 4. - the Government wants to regulate the bridge to maximize the surplus of the consumer while ensuring that Pont Debout does not lose. Suggest an optimal policy for the government.
1 The inverse demand to cross a river is given by P = 8 − Q, where P is the asking price for a passage. Standing Bridge monopoly connects the two shores. The monopoly cost is fixed: C(Q)= 4. - the Government wants to regulate the bridge to maximize the surplus of the consumer while ensuring that Pont Debout does not lose. Suggest an optimal policy for the government.
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.8P
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The inverse demand to cross a river is given by P = 8 − Q, where P is the asking price for a passage. Standing Bridge monopoly connects the two shores. The monopoly cost is fixed: C(Q)= 4.
- the Government wants to regulate the bridge to maximize the surplus of the consumer while ensuring that Pont Debout does not lose. Suggest an optimal policy for the government.
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