As the manager of a monopoly, you face potential government regulation. Your inverse demand is P = 50 - 1Q, and your costs are C(Q) = 18Q. a. Determine the monopoly price and output. Monopoly price: $___ Monopoly output units____ b. Determine the socially efficient price and output. Socially efficient price: $____ Socially efficient output Units___ c. What is the maximum amount your firm should be willing to spend on lobbying efforts to prevent the price from being regulated at the socially optimal level? $____

As the manager of a monopoly, you face potential government regulation. Your inverse demand is P = 50 - 1Q, and your costs are C(Q) = 18Q. a. Determine the monopoly price and output. Monopoly price: $_ Monopoly output units b. Determine the socially efficient price and output. Socially efficient price: $ Socially efficient output Units_ c. What is the maximum amount your firm should be willing to spend on lobbying efforts to prevent the price from being regulated at the socially optimal level? $____

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter9: Monopoly

Section: Chapter Questions

Problem 1QFR

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