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As the manager of a monopoly, you face potential government regulation. Your inverse demand is PQ,CQQ. = 35 - 1 and your costs are () = 9
a. Determine the monopoly price and output.
Monopoly price: $
Monopoly output: units
b. Determine the socially efficient price and output.
Socially efficient price: $
Socially efficient output: units
c. What is the maximum amount your firm should be willing to spend on lobbying efforts to prevent the price from being regulated at the socially optimal level?
Past experience has explain how that an 80% learning curve applies to the labor required for producing these units. The time to complete the first unit has been estimated to be 1.76 hours.
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