Price $10 $9 $3 $7 Problem 2 In 1974, the US Justice Department filed an antitrust lawsuit against AT&T and both parties agree to a consent decree that AT&T would relinquish control of their monopoly of telephone services in 1982. This consent decree took effect in 1984 and the Bell System was broken apart into seven independent companies called the \"Baby Bells." Assume that the \"Baby Bells\" competed against each other in the long-distance telephone services under the conditions of perfect competition and that each rm's individual marginal cost curve was identical (essentially, take the marginal cost curve in the gure as the aggregate supply curve for all the Baby Bells): Long Distance Phone Calls in 1985 (Aggregate Market) 510 Long Distance Phone Calls in 1985 (individual Firm) Marginal Con Curve $9 Marginal Cost Curve SB 3]" lsoprot Curve A $6 isoprot Curve B 0.! -2 $5 Average Cost Curve a. $4 $3 $2 31'\" Demand Curve Demand Curve 0 2 4 6 B 10 12 14 16 18 20 22 24 O 0.3 0.6 0.9 1.1 1.4 1.7 2.0 2.3 2.6 2.9 3.1 3.4 Quantity (in hundreds of thousands of calls) Quantity (in hundreds of thousands of calls) a. For the price-taking "Baby Bell" firm, what is the equation of their individual demand curve? b. What quantity of long-distance phone calls did all the Baby Bells collectively provide to consumers each month (what was the equilibrium quantity)? c. What was the price of each these phone calls (equilibrium price)? d. After AT&T was broke apart into the seven "Baby Bells\" and each was competing against the others), what was the Consumer Surplus, Producer Surplus, and Dead Weight Loss (if any) of the long-distance telephone market. e. Compare the outcomes following implementation of the consent decree to the outcomes before. Who benefited from the Justice Department's antitrust action? Who was harmed