(a) What is the profit-maximizing choice of output? (b) If the government could set a price ceiling on this monopolist in rder to force it to act as a competitor, what price should they set? (c) What output would the monopolist produce if forced to behave as a or?
(a) What is the profit-maximizing choice of output? (b) If the government could set a price ceiling on this monopolist in rder to force it to act as a competitor, what price should they set? (c) What output would the monopolist produce if forced to behave as a or?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![14.22. A monopolist has a cost function of c(y) = y so that its marginal
costs are constant at $1 per unit. It faces the following demand curve:
0,
D(p) = { 100/p if p < 20.
if p > 20;
(a) What is the profit-maximizing choice of output?
(b) If the government could set a price ceiling on this monopolist in
order to force it to act as a competitor, what price should they set?
(c) What output would the monopolist produce if forced to behave as a
competitor?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3d7ad67e-d622-4212-9652-f3bf77eb4169%2Fa3ce795f-1dc3-403f-b37d-49ea6b66ce87%2Fpti9pj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:14.22. A monopolist has a cost function of c(y) = y so that its marginal
costs are constant at $1 per unit. It faces the following demand curve:
0,
D(p) = { 100/p if p < 20.
if p > 20;
(a) What is the profit-maximizing choice of output?
(b) If the government could set a price ceiling on this monopolist in
order to force it to act as a competitor, what price should they set?
(c) What output would the monopolist produce if forced to behave as a
competitor?
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