Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $10 million per year and a variable cost of $1 per bag no matter how many bags are produced.
Instructions:
Enter your answers as whole numbers. In part e, round your answer to 2 decimal places.
(A) If this firm kept on increasing its output level, would ATC per bag ever increase? Is this a decreasing-cost industry?
(B) If you wished to regulate this monopoly by charging the socially optimal price, what price would you charge?
At that price, what would be the size of the firm’s profit or loss? At that price, the firm's equals $ million. Would the firm want to exit the industry?
(C) You find out that if you set the price at $7 per bag, consumers will demand 10 million bags. How big will the firm’s profit or loss be at that price?
(D) If consumers instead demanded 20 million bags at a price of $7 per bag, how big would the firm’s profit or loss be?

Profits from using currency options and futures. on july 2, the two-month futures rate of the mexican peso contained a 2 percent discount (unannualized). there was a call option on pesos with an exercise price that was equal to the spot rate. there was also a put option on pesos with an exercise price equal to the spot rate. the premium on each of these options was 3 percent of the spot rate at that time. on september 2, the option expired. go to the oanda. com website (or any site that has foreign exchange rate quotations) and determine the direct quote of the mexican peso. you exercised the option on this date if it was feasible to do so. a. what was your net profit per unit if you had purchased the call option? b. what was your net profit per unit if you had purchased the put option? c. what was your net profit per unit if you had purchased a futures contract on july 2 that had a settlement date of september 2? d. what was your net profit per unit if you sold a futures contract on july 2 that had a settlement date of september 2