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1. Suppose a natural monopolist has fixed costs of $50 and a constant marginal cost of $10. The demand for the product is as follows:
Price ($) $100 90 80 70 60 50 40 30 20 10
Quantity demanded per day 0 5 10 15 20 25 30 35 40 45
a) What price and quantity will prevail if the monopolist isn’t regulated?
b) What price-output combination would exist with efficient pricing (MC = P)?
2. Draw a graph with MC, Demand curve and MR curves for the problem above. Show the price-output combination for each of the questions (a) and (b) above.
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they added five workers, and productivity also increased by 50,000 pages per day. Copiers cost about twice as much as workers. Would you recommend they hire another employee or buy another copier?
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You are asked questions about 5 mutually exclusive candidates described as follows (all quantities are in thousands):Candidate 1: Present worth of costs = $1,000; Present worth of benefits = $8,000
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