BUS 311 – Business Environment and Public Policy The cost function for a single plant is: C(q) = 5q The market demand curve is P = 1005 – Q Find the long-run competitive equilibriumprice (1 pt) andout

BUS 311 – Business Environment and Public Policy

The cost function for a single plant is:

C(q) = 5q

The market demand curve is

P = 1005 – Q

Find the long-run competitive equilibrium
price (1 pt) and
output (1 pt).
Illustrate graphically (1 pt).
What is consumers’ surplus in competitive equilibrium? (1 pt)

If the industry is monopolized, find the:
price (1 pt) and
output (1 pt).
Illustrate graphically (1 pt).
How much profit does the monopolist make? (1 pt)

  3.  What is the welfare loss under monopoly? (2 pts)