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Assume the following Monopolistic Surplus (CS: 100, PS: 200, TS: 300). Further in the same market, assume Perfect Competition Surplus (CS: 400, PS: 0, TS:
Assume the following Monopolistic Surplus (CS: 100, PS: 200, TS: 300). Further in the same market, assume Perfect Competition Surplus (CS: 400, PS: 0, TS: 400). Compare the Total Surplus (TS). Do you choose to regulate or not. If its optimal to regulate, how big can the cost of getting the wrong level of regulation be?
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