question 1

125% + T A View Zoom Add Page Insert Table Chart Text t Shape Media Comment Collaborate Format Document 12 1. T-Company is under investigation by the U.S. Justice Department for violating anti-trust laws. The government decides that T- Company has a natural monopoly and that, if it is to keep the government business, it must sell at the price equal to marginal cost. T-Company says that it cannot do it and hires you to explain to the government why it cannot. You do so with reference to the graph below. $3.00 $2.50 $2.00 $1.60 Price $1.50 ATC $1.00 -e -. MC $0.50 MR D $0.00 Qm Qr QC Quantity A) What price would the company charge if it were unregulated? B) Refer to the graph above and explain why the company cannot sell at the P = MC. C) What price would you advise the company should be allowed to charge if regulated? D) Why would you advise this specific price? 2. In 2015, the Rock and Roll Hall of Fame and Museum charged adults $28.85 for admission. Seniors and military services were charged $20.50, and children between 9 and 12 years old were charged $16.25. a) Based on the admission fee for adults, seniors and children, was the Rock and Roll Hall practicing price discrimination? If so, what type of price discrimination