Business, 24.03.2021 20:40, gabbie63

Consider a monopoly with inverse demand curve P(q) = 20 – 24 and marginal costs MC(q) = 4 + 49 (a) What is the optimal quantity and price for the monopolist? What is the socially optimal quantity?
(b) Calculate the deadweight loss and reduction in consumer surplus due to monopoly distortions.
(c) Assume now that Congress is debating regulating this monopolistic industry to elim- inate monopoly distortions. Some economists object that setting up a regulatory apparatus is costly in terms of salaries of regulators and other administrative costs. Let F denote this cost. What is the maximal value FMAX such that for F > FMAX it is no longer optimal to set up this regulatory apparatus?

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Consider a monopoly with inverse demand curve P(q) = 20 – 24 and marginal costs MC(q) = 4 + 49 (a)...