The Public Service Commission of State X issued a regulation completely banning all advertising that “promotes the use of electricity” by any electric utility company in State X. The commission issued the regulation to conserve energy. Central Electric Corporation of State X challenges the order in the State courts, arguing that the commission has restrained commercial speech in violation of the First Amendment. Was the corporation’s freedom of speech unconstitutionally infringed? Explain.

Exhibit 15-5 P/$ 22 18 84 14- 11 MR 56 8 10 a) P=$24 and Q=5 b) P=$24 and Q = 8 c) P = $20 and Q=8 MC /AC If the natural monopoly in Exhibit 15-5 is regulated so that it earns a normal profit, then d) P= $22 and Q=6 B e) P=$18 and Q- O Q/1

What is the correct answer for this?

The goals of state and federal regulators can differ significantly. True False   Legislative action can be used to alter agency procedures. True False

To what extent would you consider the setting up of regulatory bodies an appropriate and effective solution to the principal-agent problem in markets where there is a natural monopoly?

Suppose an industry experience decreasing average costs of production over the relevant range of market demand. Discuss the merits of a regulation requiring the natural monopolist to set a price where demand equals marginal cost and to service all willing customers. What about where demand equals average cost? Are any practical difficulties likely to be encountered with either regulatory program?- Chapter 9 - Monopoly - Microeconomics

A monopolist produces a certain good. The cost c for producing this good is given by c = 20q, whereq is the quantity produced. The (inverse) demand function for this product is given by p = 30 − 0.01q,where p is the price per unit of the product. We assume that the full produced quantity is sold. Thegovernment taxes the sales of the good and would like to maximize the received tax T .Suppose in first instance that the government introduces a tax of 4 monetary units per unit of theproduct sold. We determine how much the government then receives.

A monopolist has a constant marginal cost of production. Its total revenue function is given by the following table. Quantity Total Revenue ($) (units) 1 68 2 108 3 142 170 5 192 6. 208 7 218 If the monopolist finally chooses to produce 4 units, the marginal cost must be strictly greater than $[ Answer ]. (In integers, please.) 4-

Assuming that the firm is the only producer in a market, the social cost of the output decision of a profit-maximizing monopoly firm. Can you discuss the assumption that the government wants to set a price ceiling that maximizes the monopolist's output? What price should the government set? Thank you!

1. Natural Monopoly Given the inverse supply and inverse demand equation below, 1 PD 3D + 40 Ps= -5QD + 30 a. Find the equilibrium without any government intervention (Q* = 21.4, P* = 32.9) b. If the market is to be regulated, find the minimum subsidy to get an optimal equilibrium (562.5) 2. Two sided bidding These are the list of bids from electricity producers as well electricity distribution firms. Electricity producers Electricity distribution Asking price/KWh quantity/KWh Asking price/KWh quantity/KWh 25 $ 35 $ $ $ $ $ 0.77 0.36 0.48 0.55 0.68 35 35 30 40 SSSS 0.50 0.38 0.57 0.68 0.44 60 20 15 40 a. Find the optimal market price and quantity (P* = 48 to 50, Q* = 70) b. Find the total welfare 3. Peak-load pricing Given the following peak demand and off peak demand, Qpeak = -Pp + 120 Qoffpeak = -2PD + 60 a. If the operational cost for off peak and peak period is $5 and the capital cost is $50, find the optimal pricing mechanism! (PPeak = $55, Poffpeak = $5) b. If the capital cost is…