1. Two firms compete in a market to sell a homogeneous product with inverse demand function P = 960-6Q. Each firm produces at a constant marginal cost of $60 and has no fixed costs. a.Assuming the firms collude and act as a monopolist, compute i. Equilibrium price and quantity ii. Total profits iii. Consumer surplus iv. Total welfare loss relative to perfect competition (if any) b. Assuming perfect competition, compute i. Equilibrium price and quantity ii. Profits and producer surplus iii. Consumer surplus and total surplus

The graph illustrates an industry in which many firms operating in perfect competition are taken over by one firm that operates as a single-price monopoly. Draw the following shapes: 1) the consumer surplus arising from monopoly. Label it CS. 2) the deadweight loss arising from monopoly. Label it DWL 3) the loss of consumer surplus that is a gain to the monopoly as producer surplus. Label it Monopoly's gain. Indicate whether each of the following statements is true or false. At the competitive equilibrium, marginal social benefit equals marginal social cost. At the competitive equilibrium, the sum of consumer surplus and producer surplus is maximized. At the long-run competitive equilibrium, firms produce at the lowest possible long-run average cost. 30- 25- 20 15- 10- 5- Price and cost (dollars per haircut) 0+ 0.0 MR 1.0 2.0 3.0 4.0 Quantity (thousands of haircuts) MSC 5.0

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Assume a market for petroleum products, and let D denote the demand of petroleum products while MC the marginal cost. The inverse demand is p = 100 - q, and the MC is MC = q.a. Use a figure to depict the competitive outcome assuming many producer and many consumers. Derive the competitive equilibrium outcome.b. Use a second figure to explain the monopoly solution assuming a single seller. Derive the monopoly solution.

An industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600. According to the general rule of thumb, the HHI of this industry implies that the market structure is: a. competitive. b. noninclusive. c. monopoly. d. noncompetitive.

Sketch a graph of the theater's demand functions, marginal revenue, and marginal cost to find the following: 1. The firm's profit-maximizing price = $____? 2. Ticket output = ____? 3. Economic profit = $ ____? 4. Compute consumer surplus, producer surplus, and deadweight loss

2. The demand and total cost functions for a monopoly firm are: Q(P) 20-0.5P TC(Q)=4-Q+0.5 Q² a) Derive the profit maximising Q₁, P, and compute the firm's profit p 'M' M b) Suppose instead a competitive industry where the MC curve is the competitive industry's supply function. Derive the competitive industry equilibrium P* and Q*. c) Drawing on a) and b), use a diagram and algebra to compare the monopoly industry and the perfectly- competitive industry outcomes in terms of a. equilibrium prices and quantities, b. economic efficiency (total economic surplus), and c. distribution in terms of consumer surplus and producer surplus

Please label your graphs axes correctly. Label all curves and shade properly Supply and Demand, show an elastic, inelastic, perfectly elastic, and perfectly inelastic Demand     Price ceiling in effect and what it causes in terms of quantity and surplus or shortage, dead weight loss   Perfectly Competitive firm showing profit, MC, ATC, Demand   Perfectly Competitive firm in shutdown      Side by side graphs, market and PC, showing the transition from losses to long-run  Monopoly graph, show the following: Where demand is elastic where they maximize total revenue, Socially optimal price, productively efficient profit, Consumer surplus deadweight loss producer surplus 7. Factor Market- side by side graphs with a labor market  8. Monopolistic competition in the long-run    9. Economies of scale, diseconomies of scale 10.Trade graph, showing free trade and showing the tariff.  Label and shade DWL  Consumer/Producer surplus on both deadweight loss tax revenue  14. Negative externality in…

7. Comparing monopoly and perfect competition Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium, with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply curves (S= MC) in the market for hot dogs. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from perfect competition. PRICE AND COSTS (Dollars per hot dog) 0.5 བྷྲ ༷ ྴ་ཤཱ་བྷ་ཛྙྰ་བླླ་ཤཱ་བ། 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.0 0 0 30 60 90 Perfect Competition S=MC D 120 150 180 210 240 270 300 QUANTITY (Hot dogs) PC Outcome Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. This firm buys up all the rest of the hot dog vendors in the city and operates as a monopoly. Assume…

2. Consider a monopolistic competitive industry with 4 firms producing the same good. The (inverse) demand for the good is given as: p=30-Q where is total units of the good produced by the firms: Q = Eq. Each firm chooses their output qi to maximize profits. The cost of producing q units of output is the same for all firms: C(qi) = 6qi for all i = 1, ..., 4. (a) Suppose all 4 firms choose their outputs at the same time (i.c., Cournot model), what will be the profit-maximizing outputs for each firm. [Note: Firms are iden- tical and face the same demand curve, hence model is symmetric]