Electric Company Monopoly 300 285 270 - 255 240 - 225 210 - 195 180- 165 Price per KwH / Costs ($) 150- D 135 120- MR 105 90 75 60 45 ATC 30 15- MC 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Quantity of electric (KWH) Above is a chart showing the market for electricity where "D" is Demand, "MR" is Marginal Revenue, MC" is Marginal Cost (constant at $5) and "ATC" is Average Total Cost. (15 points) a. If the government does not regulate this monopolist, what price will it charge? b. What quantity of electricity will be sold? c. What will be the company's profit? (calculate) d. Shade the area of profit for the monopolist. e. Calculate the deadweight loss. f. If the government imposes a price ceiling equal to the marginal cost, will the monopolist make profit, lose money, or break even? g. What price ceiling should the government impose for the monopolist to break even? (approximate)