Question: The table below shows the demand schedule and total costs for a monopolist. Assuming that output units are indivisible:

a) Find the profit-maximizing price and output combination of the monopolist (use MC and MR) and his/her maximum profits

c) If the industry was perfectly competitive (under long-run equilibrium) what would be the equilibrium (P, Q)? Depict diagrammatically the new equilibrium (P, Q) and find industry profits under perfect competition.

d) Contrast outcomes (c) and (b), Monopoly versus Perfect Competition, from the point of view of social efficiency.

e) Suppose that under perfect competition, total costs (TC) (for the industry as a whole) are 4 times higher. Find the new industry equilibrium (P, Q) and contrast to the monopoly outcome under (d).

f) Even if monopoly, in case (d), might prove more efficient than perfect competition, how could the government maintain the monopoly and still achieve a more socially efficient outcome?