Problem 1 Consider a single firm that sells goods under two different market demand conditions as shown in Figure 5.20. Theoretically, the firm may operate as a 1. Monopoly at selline price pn and at output level 4m 2. Parcto optimality at selling price p0 and at output level q 3. Nonprofit organization at selling price p and at output level q. (a) For the three theoretical operating conditions and the condition of low of high demand indicated on the graphs, pn+p, and p, and qq, and 4 . (b) Under what conditions does the firm operate at net profit? (c) Under what conditions will the firm require a subsidy if the firm operates at a net loss? 252 Economic Considerations for Resource Allocation Figure 5.20