Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $30 million per year and a variable cost of $1 per bag no matter how many bags are produced.

Suppose you have been tasked with regulating a single monopoly rm that sells 507pound bags of concrete. The rm has xed costs of $30 million per year and a variable cost of $1 per bag no matter how many bags are produced. Instructions: Enter your answers as a whole number. In part 9, round your answer to two decimal places. a. 'this firm keeps 'ncreasing its output level. will ATC per bag ever increase? (Click to select) v Are there economies of scale at all levels of output? (Click to select) v b. If you wished to regulate this monopoly by charging the socially optimal price, what price would you charge? $ per bag A that price, the size of the rm's [Click to select) v would be $5 million. Will the rm want to exit the indus ry? (Click to select) v c. You find out that if you set the price at $2 per bag, consumers will demand 30 million bags. A that price, the rm's prot or loss will be $ million. d. If consumers instead demanded 40 million bags at a price of $2, how big would the rm's profit or loss be? A that price, the size of the rm's [Click to select) v would be 55 million. e. Suppose that demand is perfectly 'nelastic at 40 million bags, so that consumers demand 40 million bags no matter what the price is. W'Iat price should you charge if you wantthe firm 0 earn only a fair rate of return? Assume as always that TC includes a normal pro . $