BUSI 620 MENTOR It's Your Life/busi620mentor.com BUSI 620 MENTOR It's Your Life/busi620mentor.com | Page 39

with 10 equal sized firms, based on its 1984 Herfindahlindex guidelines only

Problem 13: Explain:

a) In what way the U. S. trucking industry exemplified the capture theory hypothesis of government regulation prior to the passage of the Motor Carrier Act of 1980 and

b) The result of the passage of the Motor Carrier Act in 1980.

Problem 15: From the following figure referring to natural monopolist, indicate

a) The best level of output, price, and profit per unit and in total for the monopolist

b) The best level of output and price with a lump sub tax that would eliminate all monopolists profits

c) The best level of output, price and profits per unit and in total with a $ 3 per unit tax collected from the monopolist, and

d) The best level of output and profit per unit and in total if the government sets the price of the product or service at $ 10.

e) Which is the best method of controlling monopoly power? Why?

=============================================