Problem: Consider a situation where a city is considering services from one cable provider in a given area. Given the demand and total cost functions of
P = 28 - 0.0008Q
TC = 120,000 + 0.0006Q2
Where Q is number of cable subscribers and P price in dollars of monthly cable service.
Q1. How many cable subscribers would be expected if cable firm was allowed to operate completely unregulated
Q2. How many cable subscribers would be expected if company acted like a perfect competitor
Q3. How many cable subscribers would be expected if city did not allow the firm to charge more than $18 price
Q4. What is profit if company was allowed to operate completely unregulated
Q5. What would be deadweight loss if company acted like a perfect competitor
Q6. What would be gain in social welfare if company was forced to act like a perfect competitor instead of an unregulated monopoly