Answer: $3000
Explanation:
Based on the information given, the amount of loan that Milly needs will be the addition of the down payment and the cash allowance and this will be:
= Down payment + Cash allowance
= $2500 + $500
= $3000
Molly needs a loan of $3000
Answer: The optimal price is higher than market price by less than $0.50.
Explanation:
Since, it was given that Coase theorem doesn't hold in this situation, hence, the social marginal cost is greater than the private marginal cost by $0.50. The social marginal cost curve lies towards the left of demand curve.
Since the demand and supply curve are not perfectly elastic or inelastic, so the optimal equilibrium occurs at a point (price) which is greater than the prevailing market price, but the difference in the price is less than $0.50.
Therefore, the optimal price is higher than market price by less than $0.50.
<span>From the monopolist points of view the benefits are, holding 100% of the market, the ability to have a great influence on price and of course, no competition.
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