Question 1: According to chapter 11, "Public Utilities often operate as a natural monopoly." (a) As a regulatory specialist at TWW Co. you're attending an in-house meeting and is asked to explain the impact of de-regulation on a natural monopoly business. Describe your response including whether or not you agree with TXX Co. natural monopoly business model. Explain one economic reason why you agree or disagree with the company's current business model. (b) After you've given your response, a colleague asks, "what regulatory options does TWW Co. have as a natural monopoly"? Describe your explanation including the positives and/or negatives of each regulatory option available to company. (sure you wish this colleague was not at the meeting, but there's always one at every meeting). (c) back at your office, you see this note from you boss, "we need to discuss how TXX can compete if the govt. decides to split the company. We should consider TXX rising operating costs (ie. production, overhead, etc.), pricing mechanism and possible raw materials shortages as market demand changes." Describe your response and include recommendations on how the noted factors will affect TXX profits. (reference section 11.3 to respond to (c)). Question 2: As evident in week 6 readings, economic and policy challenges to eliminate pollution is costly. Your role: team leader of Environmental Protection (EP) at ABC Inc. which is a partner co. of LNG International. (a) As the team leader, you are asked about the following: (a) the U.S. govt. outlines a new set of policies that focuses solely on market outcomes, what would be two major issues of this policy initiative for ABC Co.? Explain with an example how each will be a setback for ABC Co. (b) Recently, you realize a potential side effect of trying to eliminate pollution is that the company could run into major issues with the law of diminishing marginal utility. You share this with your team as they get to work on the company's latest report on EP costs, they ask you to explain the law of diminishing marginal utility. Briefly explain the parameters of this concept; include an example to show them how to differentiate marginal cost and utility. (c) your boss stops by your office with a new concern. ABC Co. wants to move forward with fossil fuel production to align more with LNG International. She asks that you do a memo on the benefits and negatives of deregulation in case there is a decision in favor of deregulation. (ref. Section 11.4). She also mentions the company's inefficiency with overall production to date and asks if you could outline a couple of suggestions to curb this in your memo.

Question 3: Please read ch. 9 & 10 before answering these questions. (*) there maybe some overlap between ch. 9 - 10 on this question. During the mid-1970's, the Organization of Petroleum Exporting Countries, "OPEC" raised the price of oil dramatically. At the time, many experts noted it is unlikely that OPEC could operate under this intergovernmental unit over the long term. (a) Based on ch. 9/10 (*) briefly describe OPEC's market structure during the 1970's? Do you notice a difference in OPEC's market structure of the 1970's and 2021-22?. Include two reasons why the market structure of the 1970's either changed or stayed the same in your response. (b) explain two reasons why oil prices were were exceptionally high during the 1970's. Include one example for each reason. Do you see any similarities in between oil prices in the 1970's and in 2021-22? (c) According to ch. 9, pg. 224, "in the real world, a monopolist does not have enough information to analyze its entire total revenue and total cost curves." Would you say there is sound economic evidence available to prove that OPEC does/does not have enough information to analyze revenue and cost from 2015 to 2020. Include your research and explain how the data you present support the statement above. (d) Briefly discuss whether it is possible to apply marginal analysis to illustrate marginal costs and benefits to OPEC monopoly business model.