A. A Monopolist producing and supplying cooking gas to Mombasa city faces the demand function. Q = 8800 – 20P. Its cost function is given by TC = 20Q + 0.05Q2 .i. Determine the quantity of cooking gas she will produce and the price she will charge to maximize profits and determine her profit. ii. Explain how her profits will be affected if regulators forced her to operate like a perfectly competitive firm. iii. Illustrate and compute deadweight loss and lost consumer surplus associated with her Monopoly operations.

A. A Monopolist producing and supplying cooking gas to Mombasa city faces the demand function. Q = 8800 – 20P. Its cost function is given by TC = 20Q + 0.05Q2 .i. Determine the quantity of cooking gas she will produce and the price she will charge to maximize profits and determine her profit. ii. Explain how her profits will be affected if regulators forced her to operate like a perfectly competitive firm. iii. Illustrate and compute deadweight loss and lost consumer surplus associated with her Monopoly operations.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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