Blue Rose Inc. is the only flower grower to have cracked the secret of making a blue rose. Figure 1 shows the demand for blue roses and the marginal cost of producing a blue rose. What is Blue Rose’s profit-maximizing output? What price does Blue Rose Inc. charge and is it efficient?

Hawaii Cable Television is a natural monopoly. Sketch a market demand curve and the firm’s cost curves. Use your graph to work Problems 5 to 8.