Barnacle Industries was awarded a patent over $15$ years ago for a unique industrial strength cleaner that removes barnacles and other particles from the hulls of ships. Thanks to its monopoly position, Barnacle has earned more than $$160$ million over the past decade. Its customers$-$spanning the gamut from cruise lines to freighters$-$use the product because it reduces their fuel bills. The annual $($inverse$)$ demand function for Barnacle's product is given by $P=350-0\mathrm{.}00008Q,$ and Barnacle's cost function is given by $CQ.$ Thanks to subsidies stemming from an energy bill passed by Congress nearly two decades ago, Barnacle does not have any fixed costs: The federal government essentially pays for the plant and capital equipment required to make this energy$-$saving product.

Absent this subsidy, Barnacle's fixed costs would be about $$6$ million annually. Knowing that the company's patent will soon expire, Marge, Barnacle's manager, is concerned that entrants will qualify for the subsidy, enter the market, and produce a perfect substitute at an identical cost. With interest rates at $5$ percent, Marge is considering a limit$-$pricing strategy.

What would Barnacle's profits be if Marge pursues a limit$-$pricing strategy if the subsidy is in place? $

Instructions: Enter your responses to the nearest penny $($two decimal places$).$

What would Barnacle's profits be if Marge convinces the government to eliminate the subsidy?

What would be the profit of a new entrant if the subsidy is eliminated and Barnacle continues to produce the monopoly level of output?

$ $$

Which strategy is more beneficial to Barnacle?

$$ Eliminating the subsidy and continuing to produce the monopoly output

$$ Limit pricing