A firm has invented a beverage called slops. It doesn't taste very good, but it gives new Welk's and people a craving for Lawrence mus Johnson's jokes. Some people are willing to pay money for t so demand for Slops is given by the equation q 14 p. Slops. can be made at zero marginal cost from old-fashioned macroeconomics books dissolved in bathwater. But before any Slops can be produced, the firm must undertake a fixed cost of 54 ince the inventor has a patent on slops, it can be a monopolist in this new industry. (a) The firm will produce 7 units of Slops
(b) A Pareto improvement could be achieved by having the government pay the firm a subsidy of 59 and insisting that the firm offer Slops at zero price
(c) From the point of view of social efficiency, it is best that no Slops be produced
(d) The firm will produce 14 units of slops
(e) None of the other options are correct