Suppose you have been tasked with regulating a single monopoly firm that sells 50-kilogrambags of concrete. The firm has fixed costs of $30 million per year and a variable cost of $2 perbag no matter how many bags are produced.Instructions: Enter your answers as whole numbers. In part e, round your answer to 2decimal places.If this firm kept on increasing its output level, would ATC per bag ever increase?(Click to select)Is this a decreasing-cost industry? (Click to select)If you wished to regulate this monopoly by charging the socially optimal price, what pricewould you charge? $CO per bag.At that price, what would be the size of the firm's profit or loss?At that price, the firm's (Click to select)||equals $C)million.Would the firm want to exit the industry? (Cick to select)You find out that if you set the price at $3 per bag, consumers will demand 30 million bags.How big will the firm's profit or loss be at that price? $0If consumers instead demanded 40 million bags at a price of $3 per bag, how big would thefirm's profit or loss be?At that price, the firm's (Click to select)|equals $Cmillion.Suppose that demand is perfectly inelastic at 40 million bags, so that consumers demand40 million bags no matter what the price is.What price should you charge if you want the firm to earn only a fair rate of return?Assume as always that TC includes a normal profit.$Cper bag.

"Since you have asked a question with multiple sub-parts, we will solve first three sub-parts for…

Suppose you have been tasked with regulating a single monopoly firm that sells 50-kilogram bags of concrete. The firm has fixed costs of $30 million per year and a variable cost of $2 pe bag no matter how many bags are produced. Instructions: Enter your answers as whole numbers. In part e, round your answer to 2 decimal places. If this firm kept on increasing its output level, would ATC per bag ever increase? (Click to select) Is this a decreasing-cost industry? (Cliok to select)| If you wished to regulate this monopoly by charging the socially optimal price, what price would you charge? $C O per bag.

Suppose you have been tasked with regulating a single monopoly firm that sells 50-kilogram bags of concrete. The firm has fixed costs of $30 million per year and a variable cost of $2 pe bag no matter how many bags are produced. Instructions: Enter your answers as whole numbers. In part e, round your answer to 2 decimal places. If this firm kept on increasing its output level, would ATC per bag ever increase? (Click to select) Is this a decreasing-cost industry? (Cliok to select)| If you wished to regulate this monopoly by charging the socially optimal price, what price would you charge? $C O per bag.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.6P

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