Suppose you have been tasked with regulating a single monopoly rm that sells 50pound bags of concrete. The rm has xed costs of $30 million per year and a variable cost of $6 per bag no matter how many bags are produced. Instructions: Enter your answers as a whole number. in part e, round your answer to two decimal places. a. If this r'n keeps increasing its output level, will ATC per bag ever increase? Noe Are there economies of scale at all levels of output? Yes 0 b. If you wished to regulate this monopoly by charging the socially optimal price, what price would you charge? $ 6 a per bag At that price, the size ofthe firm's a would be $ 6 million. Will the rm wantto exit the industry? Yes 0 c. You find out that ifyou set the price at $7 per bag, consumers will demand 30 million bags. At that price. the firm's prot or loss will be $ 0 0 million. d. If consumers instead demanded 40 million bags at a price of $7, how big would the firm's profit or loss be? At that price. the size of the firm's prot a would be $ 10 a million. e. Suppose that demand is perfectly inelastic at 40 million bags, so that consumers demand 40 miliion bags no matter what the price is. What price should you charge if you want the rm to earn only a fair rate of return? Assume as always that TC includes a normal prot. $ 4.59