Question 7 The bridge linking the island of Pottsville to Texas is a monopoly bridge owned by Pottsville Bridge Corporation. The hourly demand and total cost given by the following: P = 100 2.0 Q TC: 40 Q where P is the price (that is the toll charged) and Q is the number of cars crossing. 1) What price (i.e. toll) would maximize the monopolist's prots? Price Qty $ {3 marks) 2) How many bridge crossings would be purchased? That is, what is the profit- maximizing output? {2 marks) 3) What are the monopolist's profits at this price? $ {2 marks) 4) The government wishes to regulate the price that is charged. At what level should the price be set to achieve the same number of bridge crossings as would be the case under perfect competition? $ (3 marks) 5) What will be the number of bridge crossings at the regulated price? {3 marks) 6) What are the monopolist's prots in this situation? (2 marks)