What regulatory price maximises social welfare

Assignment Help Business Management
Reference no: EM131515642

Microeconomics-Monopoly

Because of the huge fixed cost of running pipes to everyone's home, natural gas is a natural monopoly. Suppose demand is Q = 100 - P and marginal revenue is MR = 100 - 2Q. Suppose marginal cost is $20, and the fixed cost of setting up the natural gas pipelines is $1000.

a. Compute the industry outcome (quantity, price, profit, consumer surplus, and social welfare) under unregulated monopoly.

b. What regulatory price maximises social welfare? Compute the industry outcome (quantity, profit, consumer surplus, and social welfare) under this price. Would the policy be sustainable in the long run?

c. Compute the industry outcome with the laxer regulatory policy of constraining price to be no greater than average cost. Would this policy be sustainable in the long run?

Reference no: EM131515642

Questions Cloud

Real interest rate and output in the short run : Describe how each of the following developments affects the two curves, and thus how it affects the real interest rate and output in the short run:
Briefly describe jit inventory management : Describe an incremental cash flow for a project. Briefly describe JIT inventory management. Describe one type of cost that is minimized with JIT control.
Firm charge for product b to maximize profit : If the firm does not bundle the products, what single price should the firm charge for product B to maximize profit?
Compute the bond prices : Based on information provided for the treasury bonds and the ZCYs, compute the bond prices (accurate to 4 decimal places).
What regulatory price maximises social welfare : What regulatory price maximises social welfare? Compute the industry outcome (quantity, profit, consumer surplus, and social welfare) under this price.
Demand and marginal revenue curves : Assume that demand and marginal revenue curves for haircuts in the south side of Chicago market are
Create an effective marketing plan : Develop strategies to assess performance and achieve marketing goals. Create an effective marketing plan
Fiscal expansionary policies-fiscal contractionary policy : Discuss the primary goals of fiscal expansionary policies and fiscal contractionary policies and their effects on unemployment rates
Create a socratic dialogue : Identify a belief. This can be a religious belief, an ethical belief, political belief, or any other one about which reasonable minds can disagree.

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd