Section A3: Short Computation Provide your answers, if possible, inside of the box below. Points assigned to each question are specified separately. 3. Your company, Humpty, has been a monopolist for a long time in the diaper market. Your potential rival, Dumpty, would like to decide on whether to enter the market or not. Humpty currently set it's diaper price at the monopoly price $5 and enjoys $1,000 monopoly profit. Ms. Mathlady, a marketing analyst in your company, estimated Dumpty's expected sales and Humty's expected profit for each of the following pricing scenarios under the assumption that Humpty will maintain its monopoly price regardless of Dumpty's entry and price decisions. Dumpty's Unit Price Dumpty's Expected Sales Humpty's Expected Profit $5 100 units sold $500 $4 150 units sold $400 $3 200 units sold $300 Given that 1) the above estimates are correct, 2) Ms MathLady's assumption is correct, 3) In case of entry, Dumpty should choose one of the above three prices, 4) Dumpty's marginal cost is $2 per unit regardless of units sold 5) Dumpty's fixed cost is $350 if Dumpty decides to enter the market, 6) Dumpty's profit of staying out of the market is 0 (TStayOut=0), and 7) Humpty will enjoy the same amount of monopoly profit (i.e., $1,000) if Dumpty decides to stay out, What should be the maximum amount of money Humpty is willing to spend to deter Dumpty's potential entry? Note that Entry=(P-MC)*S - FC where IEntry : Expected profit of entry, P: Unit price, MC: Unit marginal cost, S: Units sold, and FC: Fixed cost The maximum dollar amount Humpty is willing to pay to deter entry? (1 point): $ Explain (3 points):Section A3: Short Computation Provide your answers, if possible, inside of the box below. Points assigned to each question are specified separately. 4. You estimated a multiple regression model Y = a + b*X, + c*X2 + e where Y is midterm exam score, X, is a dummy variable with 0 for Female and 1 for Male, X2 is a dummy variable with 0 for Korean and 1 for International and e is an error term. The estimated values of a, b, and c are 75, -10, and 5, respectively. Given these results, who is expected to get the lowest midterm exam score among 1) Josh (3rd grade, Female, Chinese) 2) Billy (4th grade, Male, Japanese) and 3) Sangwoo (2nd grade, Male, Korean)? Name of student (1 point): Explain (3 points)