Answer Happy

Use the following table to answer the following questions. Demand: Quantity 1 2 3 4 5 6 7 9 10 Price 10 9 8 7 6 5 4 2 1 Marginal 10 8 4 20-2 -4 -6 -8 Revenue Marginal Costs: 9 6 5 3 2 3 4 5 7 10 Cost Average 9 7.5 6.7 5.8 5 4.7 4.6 4.6 4.9 5.4 Cost 13. If the transit system was allowed to operate as an unregulated monopoly, what output would it supply and what price would it charge? Explain your reasoning. 14. If the transit system were regulated to operate at zero economic profit (no subsidy), what approximate output would it supply and what approximate price would it charge? Explain your reasoning. 15. If the transit system was regulated to provide the most allocatively efficient quantity of output, what output would it supply and what price would it charge? What subsidy would be necessary to insure this efficient provision of transit services? Explain your reasoning.