Please do not copy answer from other source. Thank you very much for your intelligent.

"P18.3 Costs of Regulation. Hathaway-Ross Instruments, Inc., manufactures an innovative piece of diagnostic equipment used in medical laboratories and hospitals. The Occupational Safety and Health Administration (OSHA) has determined that additional safety precautions are necessary to bring radioactive leakage occurring during use of this equipment down to acceptable levels. Total and marginal production costs, including a normal rate of return on investment but before additional safeguards are installed, are as follows:

TC $5,000,000 $5,000Q MCTC/Q$5,000

Market demand and marginal revenue relations are the following:

PL $15,000 $12.5QL MRL TR / QL $15,000 $25QL

PH $10,000 $1QH MRH TR / QH $10,000 $2QH

(Medical Laboratory Demand) (Hospital Demand)

A. Assuming that the company faces two distinct markets, calculate the profit-maximizing price-output combination in each market and economic profits.

B. Describe the short- and long-run implications of meeting OSHA standards if doing so raises marginal cost by $1,000 per machine.

C. Calculate the point price elasticity at the initial (part A) profit-maximizing activity level in each market. Are the differential effects on sales in each market that were seen in part B typical or atypical?"

C.Demand Estimation for Public Goods (15 points)

Please read "Free Riders and Hidden Preferences", and how to derive the aggregate demand curve for a public good (Figure 18.3. Optimal Amount of a Public Good), and then complete the following problem:

Assume that those students and nonstudents have revealed their group demands for junior college education, a public good, as follows:

Q = 1,500 - 0.25P, (Student demand)

Q = 4,000 - P, (Nonstudent demand)

where Q is the number of students educated per year and P is the price of tuition at the local 2-year junior college.

1.Write the student demand curve and the nonstudent demand curve, expressing price as a function of quantity.

2.Graph the student demand curve and the nonstudent demand curve. Use the quantity data as the x-axis.

3.Calculate the aggregated demand for college education.

4.Assuming, MC = 1,000 + Q, the marginal cost of college education, determine the socially optimal amount of publicly supported college education (hint: Demand = Supply).