Suppose the government has elected not to impose regulations on the industry, and so the firm faces no regulatory constraints in maximizing profits. Complete the first row of the following table. Pricing Mechanism Profit Maximization Marginal-Cost Pricing Average-Cost Pricing Short Run Price Quantity (Subscriptions) (Dollars per subscription) Complete the second row of the previous table. Suppose now that the government decides to require the monopolist to set its price equal to marginal cost. Complete the third row of the previous table. Profit Suppose now that the government decides to require the monopolist to set its price equal to average total cost. True Long-Run Decision False True or False: Under the average-cost pricing policy, the internet service provider has no incentive to cut costs.

Suppose the government has elected not to impose regulations on the industry, and so the firm faces no regulatory constraints in maximizing profits. Complete the first row of the following table. Pricing Mechanism Profit Maximization Marginal-Cost Pricing Average-Cost Pricing Short Run Price Quantity (Subscriptions) (Dollars per subscription) Complete the second row of the previous table. Suppose now that the government decides to require the monopolist to set its price equal to marginal cost. Complete the third row of the previous table. Profit Suppose now that the government decides to require the monopolist to set its price equal to average total cost. True Long-Run Decision False True or False: Under the average-cost pricing policy, the internet service provider has no incentive to cut costs.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A monopolist faces two demand curves in two separate markets. The Market Demand in the first market is P1=100-Q1 and in the second market it is P2=50-0.5Q2. The marginal & average costs are constant at 10 (MC=AC=10). Find the Monopoly Price and Quantity in each market. Find the Perfect Competition Price and Quantity in each market. Calculate Profit, Social Welfare (Consumer and Producer Surpluses), and Dead Weight Loss in both situations and in both markets.
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Please answer question d, e and f
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