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As the manager of a monopoly, you face potential government regulation. Your inverse demand is P = 70 - 1Q, and your costs are C(Q) = 22Q.
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?
$
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