previous problem From Homework 3 A market or industry demand

previous problem From Homework #3)   A market (or industry) demand curve is described by

Q = 600 – 0.5P
The monopolist firm’s cost function is
TC = 8,550 + 20Q
Find the profit-maximizing price. Enter as a value.   

(From Homework #3) Continued from the previous problem, If the monopoly is dissolved and then the market becomes perfectly competitive, how much more quantity will be produced? Enter as a value.

Solution

Answer 3 : If there is a monopoly in the market than the profit maximisation level of output is MR=MC and the price is maximum.

The price that should be charged is equal to $1200. It is maximum price charged by the monopoly.

Answer : If monopoly is changed into perfect competitive . At the quantity sold is

MR = MC

1200-4Q= 20

1180=4Q

Q= 495 units

The profit maximisation output remains same in the perfect competition and the. Monopoly.