A monopolist faces an inverse market demand pq 200 minus 1, Business Economics

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A monopolist faces an inverse market demand pq 200 minus 1

A monopolist faces an inverse market demand P(Q) = 200 − 1 2Q and a marginal cost of MC(Q) = 20 + Q.

(a) What is the unregulated monopolist’s optimal quantity?

(b) What would an appropriate regulatory instrument to bring this market back to efficiency?

(d) What is the increase in welfare resulting from regulation?

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Business Economics: A monopolist faces an inverse market demand pq 200 minus 1

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Business Economics: A monopolist faces an inverse market demand pq 200 minus 1

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