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Mathematics, 11.12.2019 20:31 kennyduong04
Consider a monopolist who cannot price discriminate. she has total cost function c(q) = q 2 and faces inverse demand function p = a β q where a is a positive parameter. (a) solve for her optimal choice of q. (b) solve for the socially optimal level of q. (c) if a government regulator requires that the monopolist produce at the socially optimal level, will a lump sum subsidy be needed to keep the monopolist in the industry? show graphically the deadweight loss associated with the monopolization of this industry (in the absence of a subsidy).
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Consider a monopolist who cannot price discriminate. she has total cost function c(q) = q 2 and face...
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