Not yet answered Points out of 9.00 p Flag question (1) The U.S. Post Office, which since 1845 has been largely a government monopoly, has been an object of continual controversy. In many cities around the country, postal service is often times mediocre, and various organizations and lobby groups have advocated its privatization. Suppose the inverse demand function for mail services is given by: P=20-2Q The Marginal Revenue is given by: MR = 20-4Q And the average cost for mail service is given by: AC = 11 - 0.5Q Marginal cost is given by: MC=11 - Q where Q is measured in millions of pieces of mail a day. Q1 If USPS operated as a monopoly with the goal of maximizing profits: (a) How many pieces should the USPS carry in a day to maximize profits? million (b) What price will it charge? dollars (c) And what will its profits be? $ million Time left 1:28:43 e Office of Management and Budget realized that monopoly pricing will lead to a loss of consumer surplus and decides to 66 F Search P Mostly cloudy hp ..... ... .. 19 144 10 insert 12 :Sign Q2. The Office of Management and Budget realized that monopoly pricing will lead to a loss of consumer surplus and decides to intervene. OMB considers the post office to be a natural monopoly so recommends that price should be equal to average cost. What is the new: (a) Quantity million (b) Price dollars (c) Profit? million dollars Q3 If the USPS operated in a perfectly competitive environment what would have been: (a) the quantity? million (b) the price? dollars (c) the profit? million dollars Time left 1:28:08 66 F Search B a # P Mostly cloudy hp