Economics Homework Help

The demand in the market for widgets is given by P = 120 – Q. Firms operating in this market do not have any fixed

cost, but have a constant marginal cost of $10.

a. Assuming this market is perfectly competitive; calculate the equilibrium quantity and price.

b. What are the equilibrium quantity and price if this market had one firm only?

c. Calculate and compare the profits between the perfectly competitive and monopoly market.

d. Calculate and evaluate consumer surplus between the two market structures. Are both markets efficient?