(1)A monopolist (AT&T) is facing the following demand schedule P=24-3Q. That is,Q=0 implies P=24, thenQ=1 impliesP=21, andQ=2 impliesP=18, and so one.Fixed costs will be neglected in this analysis. The marginal cost is constant and equal to 6 for every unit produced. Determine:

i.The quantity produced corresponding to the amount of maximum profits.

ii.Nash equilibrium price if a new competitor, Vodafone, enters the market with a MC =5

iii.Nash equilibrium price if a new competitor, Vodafone, enters the market with a MC=7.

iv.In your answer to part (i), what would happen if the government charges an entry fee =50 to this company.

v. In your answer to part (i), what would happen if the government introduces a sales tax (i.e., a specific tax per unit sold) of $3