The inverse market demand for a service is p(y) = 100 - y where y represents...

 

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The inverse market demand for a service is p(y) = 100 - y where y represents quantity. The government issues a licence to a single firm to authorize that firm to be the sole provider for that service (i.e. become a government-sanctioned monopoly of the service. There are a number of identical firms each with cost function c(y) = y2 that want to be the recipient of the licence. a) Find the government-sanctioned monopolist's optimal level of price and output (рт, ут). The firms that want to receive the licence each spend money on lobbying and lawyer fees and public relations to influence the government to award the licence to it. The inverse market demand for a service is p(y) = 100 - y where y represents quantity. The government issues a licence to a single firm to authorize that firm to be the sole provider for that service (i.e. become a government-sanctioned monopoly of the service. There are a number of identical firms each with cost function c(y) = y2 that want to be the recipient of the licence. a) Find the government-sanctioned monopolist's optimal level of price and output (рт, ут). The firms that want to receive the licence each spend money on lobbying and lawyer fees and public relations to influence the government to award the licence to it.