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I am struggling with this problem, can anyone please teach me how to do it? Thank you! 4. Suppose a natural monopoly's total cost and

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I am struggling with this problem, can anyone please teach me how to do it? Thank you!

image text in transcribed
4. Suppose a natural monopoly's total cost and marginal cost are given by C = 20 + 1062 M C = 10 and it faces (inverse) demand and marginal revenue given by P = 50 262 MR = 50 4Q a) Calculate the monopoly price, the monopoly output, and the monopoly prots. [4] b) Calculate the average total cost at the monopoly output. Graph the demand, marginal revenue (MR), average total cost (ATO), and marginal cost (MC) curves (label all axes and curves). Add the monopoly price and monopoly output from part (a) to the graph. [5] 0) Calculate the deadweight loss (DWL) from the monopoly. Identify the area of the deadweight loss on your graph. [3] d) If the government regulates the monopoly with averagecost pricing, what is the price and out put? Compare this output to the monopoly output without regulation. Does this policy result in allocative efciency? [4] e) Suppose demand decreases so that the monopoly output is 6 and the monopoly price is 9. Will the monopoly produce any output in the short run? Will the monopoly produce in the long run'? Explain. [4]

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