2. A regulated two-product natural monopolist faces demands, 100 - P1, q2 = 120 – 2p2, 91 with a total cost function of 1, 800 + 20(q1 + 92). (a) Find the profit-maximizing pair of prices. Calculate the monopolist's profit and each market and total DWL. (b) Find the Ramsey prices that satisfies zero profit. Calculate each market and total DWL.

2. A regulated two-product natural monopolist faces demands, 100 - P1, q2 = 120 – 2p2, 91 with a total cost function of 1, 800 + 20(q1 + 92). (a) Find the profit-maximizing pair of prices. Calculate the monopolist's profit and each market and total DWL. (b) Find the Ramsey prices that satisfies zero profit. Calculate each market and total DWL.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter28: Antitrust And Regulation

Section: Chapter Questions

Problem 8E

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