Q8. In Pakistan, there is only one sugar producer, a government owned monopoly called PakistanSugar. Suppose that the company were run in a way to maximize profit for the government. That is, assume that it behaved like a private profit-maximizing monopolist. Assuming demand and cost conditions are given on the following diagram, at what level would PakistanSugar target output and what price would it charge?

Now suppose PakistanSugar decided to begin competing in the highly competitive Indian market. Assume further that Pakistan maintains import barriers so that Indian producers cannot sell in Pakistan but that they are not immediately reciprocated. Assuming PakistanSugar can sell all that it can produce in the Indian market at a price P = PIND indicate the following: