Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has f

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Suppose You Have Been Tasked With Regulating A Single Monopoly Firm That Sells 50 Pound Bags Of Concrete The Firm Has F 1 (8.79 KiB) Viewed 14 times

Suppose You Have Been Tasked With Regulating A Single Monopoly Firm That Sells 50 Pound Bags Of Concrete The Firm Has F 2 (17.03 KiB) Viewed 14 times

Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $10 million per year and a variable cost of $5 per bag no matter how many bags are produced. Instructions: Enter your answers as a whole number. In part e, round your answer to two decimal places.
c. You find out that if you set the price at $6 per bag, consumers will demand 10 million bags. At that price, the firm's profit or loss will be $ [ million. d. If consumers instead demanded 20 million bags at a price of $6, how big would the firm's profit or loss be? At that price, the size of the firm's profit would be $1 million. e. Suppose that demand is perfectly inelastic at 20 million bags, so that consumers demand 20 million bags no matter what the price is. What price should you charge if you want the firm to earn qnly a fair rate of return? Assume as always that TC includes a normal profit.