Derive the monopoly price when only firm operates

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Question: There are two firms in a market with marginal cost functions given by MC1(q) = 1/3q MC2(q) = q . Market demand is given by D(p) = 20 - 2p .

(a) Obtain the competitive equilibrium output and price. Calculate consumer surplus and each firm's producer surplus.

(b) Derive the monopoly price when only firm 1 operates. Calculate consumer surplus and each firm's producer surplus.

(c) Derive the monopoly price when only firm 2 operates.

(d) Now assume that a monopolist owns two plants with marginal costs MC1(q), MC2(q) given above. Obtain the monopoly price and output.

Reference no: EM133426086

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