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A natural monopolist has the total cost function c(y) = 350 + 20y, where y is...

A natural monopolist has the total cost function c(y) = 350 + 20y, where y is its output. The inverse demand function for the monopolist’s product is p = 100 – 2y. a) The firm is required by law to meet demand at a price equal to its marginal costs. Calculate the output, the price, profits of the firm, consumers’ surplus and the deadweight loss in the market if the firm To complies with this law. b) Suppose now that regulations require this firm to produce a positive amount and to set price equal to average costs. Calculate the output, the price, profits of the firm, consumers’ surplus and the deadweight loss in the market.

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Cost c o change phice egna Ma.genal aosu Mangial lost CN 350 a) Deadına.gadu、ss- ( Becau t hous ma loet o 100-m 350 + 2 98-2그 2 + 3s00. Co woume s oo-4 203 S. BIy y ワ

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