Let the demand function and the total cost functions of a NATURALMonopoly be given by the following equations:P=2400-8QTC-1200+400Q1. Marginal revenue equation MR-2. Marginal Cost MC=________3. How much would the company produce if it is not regulated bythe government Q=_4. At what price would it sell its product if not regulated P=_5. What would the Average cost equation be?ATC=LRAC=_6. How much would it produce and at what price if it was regulatedwith the Average cost pricing rule QR¹=_PRI=In suchcase the economic profits would be.7. How much would be produced and at prie if it was regulated withthe Marginal Cost Pricing rule? QR²=pR2=in suchcase would the company have gains or losses and of whatmagnitude?.8. Mention the subsidy that the government would need to give thecompany in such case9. Graph your results either in one single graph or in three separategraphs your previous results.

A natural monopoly has the following total cost and demand curves. P=2400 - 8QTC=1200 + 400Q

Answered: P=2400-8Q TC-1200+400Q 1. Marginal…

P=2400-8Q TC-1200+400Q 1. Marginal revenue equation MR- 2. Marginal Cost MC=_ 3. How much would the company produce if it is not regulated by the government Q=_

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Let the demand function and the total cost functions of a NATURAL
Monopoly be given by the following equations:
P=2400-8Q
TC-1200+400Q
1. Marginal revenue equation MR-
2. Marginal Cost MC=________
3. How much would the company produce if it is not regulated by
the government Q=_
4. At what price would it sell its product if not regulated P=_
5. What would the Average cost equation be?
ATC=LRAC=_
6. How much would it produce and at what price if it was regulated
with the Average cost pricing rule QR¹=_
PRI=
In such
case the economic profits would be.
7. How much would be produced and at prie if it was regulated with
the Marginal Cost Pricing rule? QR²=
pR2=
in such
case would the company have gains or losses and of what
magnitude?.
8. Mention the subsidy that the government would need to give the
company in such case
9. Graph your results either in one single graph or in three separate
graphs your previous results.

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