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Suppose Market demand is given as Qd = 60 – 2P. Market supply is given as...

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Economics

Suppose Market demandis given as Qd = 60 – 2P. Market supply is given as Qs = 2P Alsoassume ATC = 0.4Q.

a. How many units ofthe product would the perfectly competitive market supply? Whatwould the equilibrium price be?

b. What are the profitmaximizing price and quantity if this market is a monopoly?

c. Calculate thedead-weight loss created if this market started off as perfectlycompetitive but then became a monopoly.

Answer & Explanation Solved by verified expert
3.8 Ratings (744 Votes)
c With reference to figure 1 we observe that the totalwelfare under perfect competition area of the triangle AOE areaof the triangle ABE area of the    See Answer
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