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Question: This has been asked before, but I am not entirely too confident about the answers. Please don't copy and paste form the previous one and show work. I will rate after seeing answers.
Assume we have a market for which: P=17-0 and TC = 5Q + 0.5Q^2 , where "P" is the price of the output "Q" and "TC" is the total cost of production.
a) Suppose the market consisted of perfectly competitive firms in the short run. How much output will it produce? How much profit will it earn? What price will be charged?
b) Suppose the market consisted of perfectly competitive firms in the long run. How much output will it produce? How much profit will it earn? What price will be charged?
c) Suppose the market consisted of a monopolist in the short run. How much output will it produce? How much profit will it earn? What price will be charged?
d) Suppose the market consisted of a monopolist in the long run. How much output will it produce? How much profit will it earn? What price will be charged?
e) What can you conclude about the effects of monopoly relative to perfect competition, given the answers above?
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