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 ?

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