Q. As the manager of a monopoly, you face potential government regulation. Your inverse demand is P = 25-Q also your costs are C (Q) = 5Q.

a. Conclude the monopoly cost also output.

b. Conclude the socially efficient cost also output.

c. Illustrate what is the maximum amount your firm should be willing to spend on lobbying efforts to prevent the cost from being regulated at the socially optimal level?

Q. how does the error variance affect the variance of also slope coefficient estimator