Sign in Homework: Government and X MindTap - Cengage Learning X Course Hero * *Course Hero X + X C https:/g.cengage.com/staticb/ui/evo/index.html?deploymentld=5813538219621591114194498&elSBN=978133... A" C CENGAGE | MINDTAP Q Search this course ? Homework: Government and Product Markets: Antitrust and Regulation (Ch 25) X 7. Regulating a natural monopoly Consider the local cable company, a natural monopoly. The following graph shows the monthly demand curve for cable services, the company's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves. A-Z E T (? EI 100 + 90 80 bongo 70 8, 50 60 PRICE (Dollars per subscription) 50 ? 30 A+ 20 ATC 10 C+ MR D O 2 6 8 10 12 14 16 18 20 QUANTITY (Thousands of subscriptions) 38 OF Sunny Q Search L Di W 8:57 AM 4/20/2024 PRESign in Homework: Government and X MindTap - Cengage Learning X Course Hero * *Course Hero X + X C https:/g.cengage.com/staticb/ui/evo/index.html?deploymentld=5813538219621591114194498&elSBN=978133... A" C CENGAGE | MINDTAP Q Search this course ? Homework: Government and Product Markets: Antitrust and Regulation (Ch 25) X 0 2 6 8 10 12 14 16 18 20 QUANTITY (Thousands of subscriptions) A-Z T Suppose that the government has decided not to regulate this industry, and the firm is free to maximize profits, without constraints. EI + 1 2 Complete the first row of the following table. Short Run bongo Quantity Price Pricing Mechanism (Subscriptions) (Dollars per subscription) Profit Long-Run Decision Profit Maximization Marginal-Cost Pricing 8,000 Average-Cost Pricing 15,000 ? A+ Suppose that the government f 16,000 monopolist to set the price equal to marginal cost. Complete the second row of the previous table. Suppose that the government forces the monopolist to set the price equal to average total cost. Complete the third row of the previous table. 38.F Q Search W 8:57 AM Sunny a 4/20/2024 PRESign in Homework: Government and X MindTap - Cengage Learning X Course Hero * *Course Hero X + X C https:/g.cengage.com/staticb/ui/evo/index.html?deploymentld=5813538219621591114194498&eISBN=978133... A C CENGAGE | MINDTAP Q Search this course ? Homework: Government and Product Markets: Antitrust and Regulation (Ch 25) X puppuse wiat tie government has decided not to regulate ulis muusty, and tie III Is free to MAXIMIZE PIUIts, WILHOUL CUISI allIts. A-Z Complete the first row of the following table. Short Run Quantity Price Pricing Mechanism (Subscriptions) (Dollars per subscription) Profit Long-Run Decision EI Profit Maximization Marginal-Cost Pricing + 10 1 2 Average-Cost Pricing 15 Suppose that the government forces the monopolist to set th equal to marginal cost. bongo 20 50 Complete the second row of the previous table. Suppose that the government forces the monopolist to set the price equal to average total cost. ? Complete the third row of the previous table. At True or False: Under the average-cost pricing policy, the cable company has no incentive to cut costs. C- O True O False 38.F Sunny Q Search L W 8:57 AM 4/20/2024 PRESign in Homework: Government and X MindTap - Cengage Learning X Course Hero * *Course Hero X + X C https:/g.cengage.com/staticb/ui/evo/index.html?deploymentld=5813538219621591114194498&eISBN=978133... A C CENGAGE | MINDTAP Q Search this course ? Homework: Government and Product Markets: Antitrust and Regulation (Ch 25) X puppuse wiat tie government has decided not to regulate ulis muusty, and tie III Is free to MAXIMIZE PIUIts, WILHOUL CUISI allIts. A-Z Complete the first row of the following table. Short Run Quantity Price Pricing Mechanism (Subscriptions) (Dollars per subscription) Profit Long-Run Decision EI Profit Maximization Marginal-Cost Pricing + Negative 1 2 Average-Cost Pricing Positive Suppose that the government forces the monopolist to set the price equal to marg bongo Zero Complete the second row of the previous table. Suppose that the government forces the monopolist to set the price equal to average total cost. ? At Complete the third row of the previous table. True or False: Under the average-cost pricing policy, the cable company has no incentive to cut costs. C- O True O False 38.F Sunny Q Search L W 8:57 AM 4/20/2024 PRESign in Homework: Government and X MindTap - Cengage Learning X Course Hero * *Course Hero X + X C https:/g.cengage.com/staticb/ui/evo/index.html?deploymentld=5813538219621591114194498&eISBN=978133... A C CENGAGE | MINDTAP Q Search this course ? Homework: Government and Product Markets: Antitrust and Regulation (Ch 25) X puppuse wiat tie government has decided not to regulate ulis muusty, and tie III Is free to MAXIMIZE PIUIts, WILHOUL CUISI allIts. A-Z Complete the first row of the following table. Short Run Quantity Price Pricing Mechanism (Subscriptions) (Dollars per subscription) Profit Long-Run Decision EI Profit Maximization Marginal-Cost Pricing + Exit the industry 1 2 Average-Cost Pricing Stay in business Suppose that the government forces the monopolist to set the price equal to marginal cost. bongo Stay or exit Complete the second row of the previous table. Suppose that the government forces the monopolist to set the price equal to average total cost. ? At Complete the third row of the previous table. True or False: Under the average-cost pricing policy, the cable company has no incentive to cut costs. C- O True O False 38.F Q Search L W 8:57 AM Sunny 4/20/2024 PRE