Suppose you are a manager of a County government project that is meant to provide rent-regulated housing units in low-income settlements. Using your knowledge of equilibrium, advice the Governor whether this policy will be a success.                                                                                                         b.     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 she will affected if regulators forced her to operate like a perfectly competitive firm. iii.             Illustrate and compute dead-weight loss and lost consumer surplus associated with her Monopoly operations.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter16: Government Regulation
Section: Chapter Questions
Problem 10E
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.      Suppose you are a manager of a County government project that is meant to provide rent-regulated housing units in low-income settlements. Using your knowledge of equilibrium, advice the Governor whether this policy will be a success.                                                                                                        

b.     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 she will affected if regulators forced her to operate like a perfectly competitive firm.

iii.             Illustrate and compute dead-weight loss and lost consumer surplus associated with her Monopoly operations.

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