Suppose the City of Columbus, Ohio, is considering two proposals to privatize municipal garbage collection. First, a
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The City has conducted a survey of Columbus residents to estimate the amount that they would be willing to pay for various frequencies of service. The City has also estimated the total cost of service per resident. Service costs are expected to be the same whether or not an exclusive franchise is granted.
A. Complete the following table.
B. Determine price and service level if competitive bidding results in a perfectly competitive price/output combination.
C. Determine price and the level of service if local regulation results in acartel.
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