Part 2. Short Question (30 points, 10 points each). This part contains five questions in which you should choose and answer only THREE questions. If you answer more than three questions, we will only grade the first three. Only clearly explained answers earn full credit. 1) Why would a single-pricing monopolist never produce an output level in the inelastic region of the demand curve? Explain your answer both graphically and algebraically. 2) Suppose Dizzyland has a monopoly in roller coaster rides in Hong Kong. Dizzyland hires someone to estimate their demand curve and finds that each customer has an identical demand of P=45-5Q, where P is price and Q is number of rides. The marginal cost of providing each roller coaster ride per customer is $5. a) (5 points) If Dizzyland can charge only one price what is the profit maximizing price charged for each ride? What is Dizzyland's profit per customer? b) (5 points) If Dizzyland can charge a two-part tariff what is the profit maximizing membership fee and usage fee? What is Dizzyland's profit per customer? 3) Technology innovation usually has some positive spillover effect to other firms. Hong Kong government recently launched a policy to heavily subsidize research and development (R&D) and technology innovation in order to maintain competence of the city in the rapidly changing world. In fact, in most economies--developed or