2. Consider a pretorence ordering assoclated with the spiciness of tacos ranging from 0 to 1 . Suppose N consumers enjoy a taco R much and are unilormly distributed in their preferences along this spectrum of spliness. The furthor a consumer is from her ideal spiciness, given by d, the more cissatisfied she is with its taste, given by t per unit away. There is orkly one taco seller in the market, facing a marginal cost of c per taco, and introducing a new taco to the menu costs F. Let these values be realized as R=20,t=2,c=5,F=25, and N=3000. A) What is the maximum profit this monopolist can earn? B) What is the maximum social surplus? C) Why is there a private incentive to over-diversify in this market? 2. Consider a pretorence ordering assoclated with the spiciness of tacos ranging from 0 to 1 . Suppose N consumers enjoy a taco R much and are unilormly distributed in their preferences along this spectrum of spliness. The furthor a consumer is from her ideal spiciness, given by d, the more cissatisfied she is with its taste, given by t per unit away. There is orkly one taco seller in the market, facing a marginal cost of c per taco, and introducing a new taco to the menu costs F. Let these values be realized as R=20,t=2,c=5,F=25, and N=3000. A) What is the maximum profit this monopolist can earn? B) What is the maximum social surplus? C) Why is there a private incentive to over-diversify in this market