A Monopolist producing and supplying cooking gas to Mombasa city faces the demand function. Q = 8800 – 20P. Its cost function is given by TC = 20Q + 0.05Q2. Determine the quantity of cooking gas she will produce and the price she will charge to maximize profits and determine her profit Explain how her profits she will affected if regulators forced her to operate like a perfectly competitive firm Illustrate and compute deadweight loss and lost consumer surplus associated with her Monopoly operations

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
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Chapter14: Monopoly
Section: Chapter Questions
Problem 14.1P
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A Monopolist producing and supplying cooking gas to Mombasa city faces the demand function.
Q = 8800 – 20P. Its cost function is given by TC = 20Q + 0.05Q2.

  1. Determine the quantity of cooking gas she will produce and the price she will charge to
    maximize profits and determine her profit
  2. Explain how her profits she will affected if regulators forced her to operate like a perfectly
    competitive
    firm
  3. Illustrate and compute deadweight loss and lost consumer surplus associated with her
    Monopoly operations
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