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Problem 38

If the transit system were regulated to operate w…

Problem 37

If the transit system were allowed to operate as an unregulated monopoly, what output would it supply and what price would it charge?


Thus, profit maximization happens in the urban transit system when there are price of $\$ 6$ is
charged to five million riders.



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Video Transcript

so we won't answer the question of what would happen if the transit system was a monopoly. Specifically taken. Look a table. He never 0.4 in your textbooks. If this wasn't under un unregulated monopoly, we knew we know several things. One they would produce whatever quantity gets them. This inequality, right? You know this, my general revenue, because more, you know, cost in your table. That's going to be whenever marginal revenue goes to marginal. Cost tickles, too. The price at this level, he's going to be $6. So that's how much they're going to charge for transit $6 and the quantity of this level is going to be five 1,000,000 writers.

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