Reference no: EM13184133
The inverse demand function for natural gas in Altoona is P(q) = 11 - Q. The Altoona market has a single natural monopoly producer with a total cost function of C(Q) = 5Q - 0.005Q2.
The public utilities commission is thinking about regulating the monopolist. Consider the following schemes:
(a) Is this market a case for natural monopoly? Why?
(b) If the monopolist is left unregulated, what are the market price and quantity, the monopolists profit, consumer surplus, producer surplus, total surplus, and dead weight loss?
(c ) If the monopolist is forced to produce where P = MC, what are the equilibrium price and quantity, the monopolists profit, consumer surplus, producer surplus, total surplus, and dead weight loss?
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: The inverse demand function for natural gas in Altoona is P(q) = 11 - Q. The Altoona market has a single natural monopoly producer with a total cost function of C(Q) = 5Q - 0.005Q2.The public utilities commission is thi..
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