Question: As the manager of a monopoly, you face potential government regulation. Your inverse demand is P = 25 1 Q, and your costs are C

As the manager of a monopoly, you face potential government regulation. Your inverse demand is P = 25 1Q, and your costs are C(Q) = 5Q.

a. Determine the monopoly price and output.

Monopoly price: $

Monopoly output: units

b. Determine the socially efficient price and output.

Socially efficient price: $

Socially efficient output: units

c. What is the maximum amount your firm should be willing to spend on lobbying efforts to prevent the price from being regulated at the socially optimal level?

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