Ecn502

Part i) 6 marks In the table below are cost and demand data for a monopolist. Show all calculations. Quantity Price demanded Marginal revenue Average cost Marginal cost $105.00 96.00 $96.00 $144.00 $144.00 87.00 78.00 90.00 36.00 78.00 60.00 70.34 30.00 69.00 42.00 63.00 42.00 60.00 24.00 60.00 48.00 6 51.00 6.00 58.50 51.00 42.00 -12.00 57.86 54.00 8 33.00 -30.00 57.50 55.50 9 24.00 -48.00 57.33 56.00 (a) What is the level of price, output and amount of profit for an unregulated monopolist that produces where MR-MC? (b) Using the data in the table, what is the price, output, and profit for a regulated monopolist that sets a "socially optimal" price Le. where P.MC? (c) Using the data in the table, what is the price, output, and profit for a regulated monopolist that charges a "fair-return" price Le. where P-ATC? (d) Analyze the effect of regulation on the allocation of resources. Which situation is most efficient? Which situation is most likely to be chosen by Bo Part II) (4 marks)