1.Suppose that the campus bookstore has a monopoly on selling textbooks. The market demand is given...

1.Suppose that the campus bookstore has a monopoly on selling textbooks. The market demand is given by P = 129 – 1.5Q and the marginal revenue is MR = 129 – 3Q. The marginal cost of selling textbooks is MC = 1 + Q. What is the profit-maximizing price the monopolist should charge for the textbooks and how many will they sell?

Price: $

Quantity:

2.Waste Services has a natural monopoly on trash pickup services to households in a local neighborhood. They can provide the service at an average cost of ATC = 480/Q + 5, and a constant marginal cost of MC = $5. Demand for water in the neighborhood is given by P = 77 – 1.5Q. What is Waste Services unregulated monopoly price, the socially optimal price, and the fair-return price?

Monopoly Price: $

Socially Optimal Price: $

Fair-Return Price: $

Expert Solution

Rahul Sunny answered 2 years ago

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