Assume, in the monopoly-versus-competition example in the text, where demand is Q = 100 and marginal cost MC-average cost AC= $20, that MC under…

2. Assume, in the monopoly-versus-competition example in the text, where demand is Q = 100 and marginal cost MC-average cost AC= $20, that MC under competition remains at $20. However, assume that the reason the monopoly can continue to be a monopoly is that it pays $10 per unit of output to reimburse lobbyists for their efforts in persuading legislators to keep the monopoly insulated from competition. For example, the lobbyists may be generating (false) studies that demonstrate that competition results in higher costs.

 
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