Monopoly - Price Discrimination and Economic Welfare
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As the manager of a monopoly, you face potential government regulation. Your inverse demand is P = 30 - 2Q, and your costs are C(Q) = 10Q. a. Determine the monopoly price and output. Monopoly price: Monopoly output: units b. Determine the socially efficient price and output. Socially efficient price: Socially efficient output: units c. What is the maximum amount your firm should be willing to spend on lobbying efforts to prevent the price from being regulated at the socially optimal level
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