1. Supposé thèřé éxišt n=30 firmš thát šeek to become a regulated franchise monopoly in a particular area due to that area's policies. Suppose that obtaining the franchise status will get that firm an additional R = $12 million in profits. Each firm already receives $5 million in profits from other ventures. a. Suppose the probability of winning the franchise status is linear in investment, each firm has an equal chance of winning the franchise status and they are all risk-neutral. How much will each firm invest in rent- seeking? b. Are the rents 100% dissipated?

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